EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842988
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 cookie cutters on 08 December 2008.
Instrument
TCO No 0842988 was made on 27 February 2009. It declares that those certain cookie cutters 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. 0842988 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 Tariff Concession Instrument No. 0842988, enacted in 2009 under the Customs Act 1901, addresses the need for a streamlined process to grant tariff concessions for specific goods. This legislative instrument allows for the reduction of customs duties on certain goods, provided that they meet the core criteria set forth in the Act. The instrument was introduced to facilitate easier access to tariff reductions for applicants, thereby encouraging trade and potentially reducing costs for businesses importing these goods. The instrument was enacted by the Parliament of Australia, with the objective of ensuring that tariff concessions are granted fairly and efficiently, based on the criteria of non-substitutability and the absence of local production. This process ensures that the application for tariff concessions is transparent and open to public scrutiny, as evidenced by the publication of the application in the Gazette.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the rate of customs duty on certain goods. This applies to entities or individuals seeking to import goods that are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. A TCO application is considered valid if, on the date of submission, no substitutable goods were produced in Australia in the ordinary course of business, as per sections 269C and 269D of the Act. If the CEO determines that the application meets the core criteria, they must issue a written order, thereby making the goods eligible for a reduced duty rate as specified in the Customs Tariff Act 1995. This legislative instrument operates nationally, impacting all importers of the specified goods within Australia, without imposing any liabilities on individuals or entities for actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0842988, made under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) for certain cookie cutters. This instrument was made on 27 February 2009 and came into effect on the date the application was lodged, 8 December 2008. The TCO declares that the specified cookie cutters are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, thereby applying a duty rate of free instead of the general rate of 5% (section 269P(3)).
The Act imposes specific obligations on applicants and the Chief Executive Officer of Customs (CEO). An applicant, such as McPhersons Consumer Products in this case, must ensure their application complies with the requirements outlined in section 269F. The CEO must review the application to confirm it is not for goods listed in section 269SJ and assess if it meets the core criteria specified in section 269C. If the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business, they must make a TCO. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)).
Failure to comply with the provisions of the Customs Act 1901 or the regulations could result in civil or criminal consequences. While the explanatory statement does not specify particular penalties for non-compliance with the TCO, the general framework of the Act could impose penalties for breaches related to customs duties and other regulations. Such penalties may include fines and, in more serious cases, imprisonment, depending on the specific breach and the relevant sections of the Act. The severity of the penalties would be determined by the nature and extent of the contravention.