EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842985
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 utensil set on 08 December 2008.
Instrument
TCO No 0842985 was made on 27 February 2009. It declares that those certain utensil set 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. 0842985 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the regulation of customs and excise duties, and it includes provisions for Tariff Concession Orders (TCOs). These orders allow for reduced rates of customs duty on certain goods, subject to specific criteria. The Tariff Concession Instrument No. 0842985 was introduced to provide tariff concessions for certain utensil sets imported by Mcphersons Consumer Products, effective from 8 December 2008. The instrument was made under section 269F of the Customs Act, which allows the Chief Executive Officer of Customs to grant a TCO if certain conditions are met, including the absence of substitutable goods produced in Australia. The instrument declares that the utensil sets in question are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a general duty rate of 5% reduced to free under the TCO. The policy objective is to ensure that the rights of importers are not disadvantaged and to potentially benefit them by allowing duty refunds for imports since the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0842985 under the Customs Act 1901 applies specifically to the concession of customs duty rates for certain goods, in this instance, a utensil set, where the application was made by McPhersons Consumer Products on 8 December 2008. The Act governs the procedure for the Chief Executive Officer of Customs (CEO) to assess and approve applications for Tariff Concession Orders (TCOs), which alter the rate of customs duty on specified goods. The instrument came into force on the same date as the application was lodged, pursuant to the provisions of the Customs Act 1901. This Act applies to any person or entity that applies for such tariff concessions, provided the goods do not fall under the exclusions specified in section 269SJ of the Act. The application process requires the CEO to ensure that no substitutable goods are produced in Australia, as defined by sections 269D and 269E of the Act. The TCO applies to the goods specified in the order, which in this case, are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, thereby safeguarding the rights of importers who can apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0842985 under the Customs Act 1901 (section 269F) allow for the application for Tariff Concession Orders (TCOs) by individuals or entities wishing to have a lower rate of customs duty applied to specific goods. The core criteria for approval of a TCO, outlined in section 269C, requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269D and 269E). If these criteria are met, the Chief Executive Officer of Customs (CEO) must make a written order (section 269P(3)), effectively granting the concession and specifying the applicable item from the Customs Tariff (section 269P(3)). In this instance, TCO No. 0842985 applies to certain utensil sets, reducing their duty rate to free from 5% (item 50 of Schedule 4 to the Tariff).
The Act imposes several obligations on the parties it governs. The CEO is required to ensure that any TCO application does not relate to goods specified in section 269SJ, which are ineligible for concession. Furthermore, the CEO must assess whether the application meets the core criteria, specifically the absence of substitutable goods produced in Australia on the day the application was lodged. The CEO is also mandated to publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO (subsection 269K(1)). This process ensures that the application undergoes due consideration and provides an opportunity for public input. Additionally, the Act requires that the TCO does not disadvantage any person, other than the Commonwealth, and does not impose liabilities for actions taken before the TCO's effective date (subsection 269S(1)).
Under the Customs Act 1901, breaches of the provisions regarding TCOs may result in various consequences. While the Act does not explicitly state offences or penalties for failure to comply with the TCO process itself, breaches of other customs-related provisions may incur civil or criminal penalties. For example, providing false or misleading information in a TCO application could lead to penalties under sections 226 or 227 of the Customs Act 1901, which address fraudulent behaviour and provide for fines up to 10,000 penalty units or imprisonment for up to 10 years, respectively. Additionally, if an entity fails to comply with the terms of the TCO once granted, they may face penalties related to the underpayment of duty, which could include fines and interest on the unpaid duty.