EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902885
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 skin exfoliating sponges on 29 January 2009.
Instrument
TCO No 0902885 was made on 24 April 2009. It declares that those certain skin exfoliating sponges 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 7.5%. 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. 0902885 is taken to have come into force on 29 January 2009.
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. 0902885, enacted under the Customs Act 1901, was introduced to provide tariff concessions on certain skin exfoliating sponges imported by McPhersons Consumer Products. The Customs Act 1901, managed by the Australian Parliament, established the framework for Tariff Concession Orders (TCOs) which allow for reduced customs duties on specific goods. The primary objective of this legislation is to ensure that no substitutable goods are produced in Australia, thereby facilitating the tariff concession for imported goods. The Chief Executive Officer of Customs (CEO) has the authority to make these orders based on applications, provided they meet the core criteria set out in section 269C of the Act. The CEO must also publish notices in the Gazette to allow for any objections before making a decision, although no objections were received in this case. The tariff concession effectively reduces the duty on the specified sponges from 7.5% to free, benefiting the importers by allowing them to apply for duty refunds on imports since the TCO came into effect on 29 January 2009.
Scope and Application
The Tariff Concession Instrument No. 0902885 under the Customs Act 1901 applies to goods specifically identified by McPhersons Consumer Products, namely certain skin exfoliating sponges. The instrument was issued by the Chief Executive Officer of Customs, following an application made under section 269F of the Act. This legislation allows for the reduction of customs duty on certain imported goods if it can be demonstrated that there are no substitutable goods produced in Australia, as per sections 269C and 269D. The scope of the Act extends to any person or entity importing these specified goods, thereby benefiting those importers by granting them a tariff concession that was not previously available. The geographic reach of this Act is national, applying across all states and territories within Australia. The Act does not specify exclusions or exemptions beyond the general criteria outlined, such as the inapplicability to goods specified in section 269SJ. The Act may also extend its application through subordinate instruments, though these are not detailed in the provided text.
Key Provisions
The Customs Act 1901 includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for lower rates of customs duty on specific goods (s 269F). To apply for a TCO, an individual must submit an application to the Chief Executive Officer (CEO) of Customs, provided the goods are not specified in section 269SJ as ineligible for TCOs (s 269F). The CEO must then determine whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). If satisfied, the CEO must issue a TCO, declaring the goods to which a prescribed tariff item applies (s 269P(3)).
Entities applying for a TCO must ensure their application is valid and meets the core criteria. They must also be aware that the CEO must publish a notice in the Gazette inviting any objections to the TCO (s 269K(1)). The CEO is required to consider any submissions received and determine whether to proceed with the TCO. The TCO takes effect on the date the application was lodged, not the date it is made (s 269S(1)). This means the TCO applies retroactively from the application date, but it does not affect existing rights or impose liabilities on anyone before the TCO’s effective date (s 269S(1)).
Breaching the requirements set out in the Customs Act 1901 or failing to comply with the provisions of a TCO could lead to penalties. However, the specific penalties are not outlined in the provided text. Generally, non-compliance with customs regulations can result in fines and other penalties as determined by the relevant authorities. It is essential for applicants and importers to adhere to the Act's requirements to avoid potential legal repercussions.
In summary, the Tariff Concession Order No. 0902885 grants a concession on the duty of certain skin exfoliating sponges, effective from 29 January 2009. The order was made on 24 April 2009, following a valid application by McPhersons Consumer Products and after the CEO was satisfied that no substitutable goods were produced in Australia. The TCO provides significant benefits to importers by reducing the duty rate from 7.5% to free, provided they comply with the Act’s requirements. Failure to comply with the Act or the terms of the TCO may result in penalties as prescribed by the relevant laws.