EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839655
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
McPhersons Consumer Products applied for a TCO in respect of certain bathroom and/or toilet accessories sponges on 12 November 2008.
Instrument
TCO No 0839655 was made on 30 January 2009. It declares that those certain bathroom and/or toilet accessories sponges are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0839655 is taken to have come into force on 12 November 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Order No. 0839655, enacted in 2009, addresses a gap in the Customs Act 1901 by allowing for tariff concessions on certain goods, specifically bathroom and/or toilet accessories sponges, when no substitutable goods are produced in Australia. This was enacted to ensure fair trade practices and to provide relief to importers of these goods, allowing them to import the specified items at a lower rate of customs duty. The order was made by the Chief Executive Officer of Customs under the authority granted by section 269F of the Customs Act 1901, ensuring that the application met the core criteria outlined in section 269C. The policy objective behind this measure was to facilitate smoother import processes and potentially stimulate market competition by reducing the cost of importing these specific goods.
Scope and Application
The Tariff Concession Instrument No. 0839655 under the Customs Act 1901 applies to the specific goods—namely certain bathroom and/or toilet accessories sponges—for which McPhersons Consumer Products applied for a Tariff Concession Order (TCO). The Act facilitates the application process for TCOs by allowing eligible goods to be subject to a lower rate of customs duty if no substitutable goods are produced in Australia. The instrument is effective from the date the application was lodged, 12 November 2008, and provides that these goods are subject to a free rate of duty as opposed to the general rate of 5%. The application of the TCO does not disadvantage any person or impose liabilities on anyone for actions taken prior to the registration date, ensuring that it only beneficially affects the rights of importers, who can apply for a refund of duty on goods imported since the effective date of the TCO. The scope of the Act extends to the Commonwealth jurisdiction and is administered through subordinate instruments as necessary.
Key Provisions
The Tariff Concession Instrument No. 0839655, made under section 269P of the Customs Act 1901, provides a lower rate of customs duty for certain bathroom and/or toilet accessories sponges. This tariff concession order (TCO) was issued following an application by McPhersons Consumer Products on 12 November 2008. The instrument came into effect on the same date and declares that the specified sponges are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate.
The obligations under this Act primarily involve the Chief Executive Officer of Customs (CEO) ensuring that TCO applications meet certain criteria. According to section 269C, the CEO must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. For the purposes of this assessment, section 269D defines "goods produced in Australia," section 269E defines "ordinary course of business," and section 269F defines "substitutable goods." The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted. In this case, the CEO received no submissions in response to the notice.
Failure to comply with the provisions of the Customs Act 1901 or the conditions of a TCO could result in penalties. However, the explanatory statement does not specify any particular offences, penalties, or consequences for breach of the TCO. It is important for parties involved to ensure they adhere to the terms and conditions set out in the TCO and the broader legislative framework to avoid any potential legal repercussions. The Act and associated regulations provide a structure for managing tariff concessions, ensuring that the application process is transparent and that the rights of all stakeholders are considered.