EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842987
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 bbq brushes on 08 December 2008.
Instrument
TCO No 0842987 was made on 27 February 2009. It declares that those certain bbq brushes 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. 0842987 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, through the introduction of Tariff Concession Orders (TCOs), seeks to provide relief on customs duties for certain goods, thereby promoting trade and economic efficiency. Enacted by the Australian Parliament, this Act provides a mechanism whereby the Chief Executive Officer of Customs can grant tariff concessions on specific goods that meet particular criteria. The primary problem it addresses is the potential economic burden on businesses and consumers due to high customs duties on imported goods that do not have local substitutes. The policy objective, as articulated within the Act, is to ensure that such tariff concessions are granted only when it is clear that no equivalent goods are produced domestically, thus preventing any adverse effects on Australian industries. The Tariff Concession Instrument No. 0842987, enacted in 2009, exemplifies this process by providing a tariff concession for certain bbq brushes, reducing their duty rate to free from the general rate of 5%.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO), which applies to specific goods and effectively reduces or eliminates the customs duty on those goods. This legislation allows individuals or entities to apply for a TCO if the goods in question are not prohibited by section 269SJ of the Act and meet the criteria outlined in section 269C, such as the absence of substitutable goods produced in Australia. This instrument is designed to benefit importers by potentially reducing their duty costs on certain goods, as exemplified by the case of Mcphersons Consumer Products, which successfully applied for a TCO for certain barbecue brushes. The application process involves a public notice period to allow interested parties to voice any objections, although in this case, no submissions were received. The TCO is effective from the date the application was lodged, in this instance, 08 December 2008, and does not retroactively affect any pre-existing rights or liabilities.
Key Provisions
The main operative sections of the Customs Act 1901, as applied to this specific Tariff Concession Order (TCO), include sections 269C, 269F, 269P, and 269SJ (paragraphs 1 to 5). Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, and the goods are not specified in section 269SJ, the CEO must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (paragraph 6).
The Act imposes several obligations and requirements on the parties involved. Firstly, any person who wishes to apply for a TCO must ensure that the application meets the core criteria. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO has the responsibility to assess whether the application meets these criteria, including the meaning of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are defined in sections 269D, 269E, and 269F respectively (paragraph 5). Once the CEO determines that the application meets the criteria, they are required to make a written order and publish a notice in the Gazette inviting submissions from any interested parties (paragraph 7).
Should a TCO be breached, the consequences can be significant. While the explanatory statement does not explicitly detail the penalties for breach, the Customs Act 1901 generally provides for both civil and criminal penalties for non-compliance with its provisions. Civil penalties may include fines, while criminal penalties could involve imprisonment. However, the specific penalties would depend on the nature and severity of the breach, as well as any additional provisions in related legislation or regulations.
In the context of this specific TCO, the explanatory statement clarifies that the order does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person for actions taken before the date of registration (paragraph 11). This means that while the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force, there are no liabilities imposed on any party.