EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842573
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 tea towel holders on 04 December 2008.
Instrument
TCO No 0842573 was made on 27 February 2009. It declares that those certain tea towel holders 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. 0842573 is taken to have come into force on 04 December 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 Instrument No. 0842573, enacted in 2009 under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods. This instrument was introduced to facilitate trade by reducing customs duties on certain goods, in this case, tea towel holders, that are not produced in Australia and have no substitutable goods domestically. The instrument was made by the Chief Executive Officer of Customs, who determined that the application from McPhersons Consumer Products met the core criteria as specified in the Customs Act 1901. The policy objective is to encourage the import of goods that are not locally produced, thereby benefiting importers and potentially consumers through lower prices. The instrument does not affect any existing rights or impose new liabilities, ensuring that it operates smoothly within the existing legal framework.
Scope and Application
The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply a lower rate of customs duty to specified goods. The Act applies to any person who can apply for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. An application 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. The CEO is required to make a written order if satisfied that the application meets the core criteria. This legislative instrument extends to the national level and is applicable across all states and territories of Australia. The rights of importers are beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the TCO is deemed to have come into force. There are no liabilities imposed on any person as a result of the TCO. The CEO is mandated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, although no submissions were received in response to this particular TCO.
Key Provisions
The key operative sections of this legislation include sections 269C, 269P, and 269K, among others. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) to be issued, specifically that no substitutable goods were produced in Australia at the time the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these core criteria, they must issue a written TCO. Section 269K(1) requires that as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. These sections together form the legal basis for the process by which tariff concessions are granted.
The obligations imposed by the Customs Act 1901 on parties or entities governed by it include ensuring that any application for a TCO adheres to the specified core criteria (section 269C). The CEO of Customs has a duty to review applications, decide whether they meet the criteria, and, if they do, issue a TCO as per section 269P(3). Furthermore, the CEO is obligated to publish notices in the Gazette upon accepting a valid application, providing an opportunity for submissions from interested parties (section 269K(1)). These obligations are critical for maintaining the integrity and transparency of the tariff concession process.
Any failure to comply with the requirements set forth in the Customs Act 1901 could result in various consequences. While the legislation does not explicitly detail offences, penalties, or specific civil or criminal consequences for breaches, the non-compliance with the TCO process could lead to invalid applications or improper tariff concessions. This might involve disputes over duty refunds, as importers could claim refunds based on the erroneous application of a TCO. Additionally, if the CEO fails to follow the mandated process, such as not publishing notices in the Gazette, this could also result in legal challenges or administrative penalties.
Section 269S(1) specifies that a TCO is effective from the day the application is lodged, which in this case is 04 December 2008 for TCO No. 0842573. This means that from this date, the specified tea towel holders qualify for the tariff concession. Importantly, the TCO does not retroactively affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or imposed with new liabilities for actions taken before the TCO's effective date. Importers, however, stand to benefit as they can apply for duty refunds for goods imported since this date. The TCO itself does not impose any new liabilities on any person, safeguarding against potential financial burdens.