EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839656
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 egg beaters on 12 November 2008.
Instrument
TCO No 0839656 was made on 30 January 2009. It declares that those certain egg beaters 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. 0839656 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 Customs Act 1901, as amended, was introduced to streamline and regulate the importation of goods into Australia, ensuring that customs duties are applied correctly and efficiently. In 2009, Tariff Concession Instrument No. 0839656 was enacted under the authority of the Customs Act to address specific issues concerning the importation of certain goods. This instrument was developed in response to an application by McPhersons Consumer Products for a Tariff Concession Order (TCO) for certain egg beaters, seeking to reduce the customs duty on these items. The instrument was made by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. The policy objective of this legislation is to provide tariff concessions where appropriate, ensuring that Australian businesses and consumers benefit from reduced customs duties on specified goods, thereby promoting trade and economic efficiency.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the procedures for making Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on certain goods. A TCO can be applied for by any person under section 269F of the Act, provided that the goods in question are not specified in section 269SJ as those that cannot be subject to a TCO. The Chief Executive Officer of Customs (CEO) must assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a written order is issued under section 269P(3), declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, resulting in a tariff concession. This process ensures that the rights of importers are beneficially affected, and they may apply for a refund of duty on goods imported since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations. Notably, the TCO does not impose any liabilities on any person, nor does it affect the rights of a person, other than the Commonwealth, as at the date of registration in a way that disadvantages that person or imposes liabilities for actions taken prior to the registration date.
Key Provisions
The Customs Act 1901 (the Act) includes provisions under Part XVA that allow the Chief Executive Officer of Customs (the CEO) to issue Tariff Concession Orders (TCOs) (section 269F). The primary requirement of section 269C is that an application for a TCO meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. A TCO reduces the customs duty on certain goods, and if the CEO is satisfied that the application meets the core criteria, they must issue a written order declaring that the goods are subject to a specified item in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). For example, McPhersons Consumer Products applied for a TCO for certain egg beaters, which was granted and came into effect on 12 November 2008, reducing the duty from 5% to free.
The Act imposes several obligations on the parties involved. An applicant must submit an application to the CEO for a TCO (section 269F). The CEO must then determine if the application meets the core criteria and decide whether to issue a TCO (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). If no submissions are received, the CEO can proceed with the TCO. McPhersons Consumer Products fulfilled their obligation by applying for the TCO on 12 November 2008, and the CEO issued TCO No. 0839656 on 30 January 2009.
The Act also specifies consequences for breaches or non-compliance. Section 269SJ of the Act lists goods that cannot be subject to a TCO, ensuring that certain critical or prohibited items do not receive tariff concessions. While the Act does not explicitly detail penalties for non-compliance with TCO requirements, general provisions under the Customs Act may apply, including fines and imprisonment for serious breaches. Importers who benefit from a TCO may also be required to provide evidence to support their eligibility for duty refunds under paragraph 126(1)(r) of the Regulations.
The TCO itself does not disadvantage any person other than the Commonwealth and does not impose any liabilities on anyone in respect of actions taken before the TCO's effective date (subsection 269S(1)). Importers, however, can apply for refunds of duty on goods imported since the TCO's effective date. McPhersons Consumer Products and other importers can benefit from reduced customs duties, provided they comply with the conditions and requirements set out in the TCO and the Customs Act.