EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906870
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 rubber plugs on 27 February 2009.
Instrument
TCO No 0906870 was made on 22 May 2009. It declares that those certain rubber plugs 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. 0906870 is taken to have come into force on 27 February 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. 0906870, enacted in 2009, serves to amend the Customs Act 1901 by providing tariff concessions for certain goods. This legislative instrument was introduced to address the gap in the duty rates for goods that are not produced in Australia and for which there are no suitable substitutes available domestically. The instrument is a response to an application by McPhersons Consumer Products, who sought a tariff concession for certain rubber plugs. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders that apply lower rates of customs duty on specified goods, provided they meet the core criteria outlined in the Act.
The policy objective of this instrument is to facilitate the importation of goods that are not produced in Australia, thereby potentially lowering costs for importers and encouraging the availability of certain products in the Australian market. The instrument ensures that the rights of importers are advantageously affected, allowing them to apply for refunds of duty paid on the specified goods since the date the Tariff Concession Order was deemed to be in effect. The instrument was enacted by the relevant legislature and commenced on the date the application was lodged, 27 February 2009.
Scope and Application
The Tariff Concession Instrument No. 0906870 pertains to the Customs Act 1901, which provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. This legislation applies to any person or entity that applies for a TCO under section 269F of the Act, provided the goods in question do not fall under the exclusions listed in section 269SJ. The instrument specifically applies to rubber plugs, as evidenced by the application from McPhersons Consumer Products, and becomes effective on the date the application was lodged, as per subsection 269S(1) of the Act. The instrument does not disadvantage any persons other than the Commonwealth and does not impose any liabilities on individuals or entities. Any person who believes there are reasons against the issuance of a TCO can submit their views to the CEO, although in this case, no submissions were received. The scope of this Act is national, with its application extending across all jurisdictions within Australia, governed by the Commonwealth.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 0906870, revolve around the establishment and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). Section 269C of the Act outlines the core criteria that an application for a TCO must meet, namely that no substitutable goods were produced in Australia on the day the application was lodged (section 269D and section 269E). Once these criteria are satisfied, the Chief Executive Officer of Customs (CEO) is mandated to issue a written order, which is the TCO, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this particular case, the TCO No. 0906870 was issued for certain rubber plugs, which now enjoy a duty-free status instead of the general rate of 5%.
The obligations imposed by this legislation on the parties involved, particularly McPhersons Consumer Products, include the requirement to ensure that their application for a TCO is valid and meets all the stipulated core criteria (section 269C). The CEO, on receiving a valid application, must make a written TCO if the core criteria are met (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received in response to the published notice.
Regarding the consequences of non-compliance, the Act does not explicitly state offences or penalties for breach of the TCO provisions. However, it is implicit that failure to meet the core criteria for a TCO application could result in the CEO not issuing the TCO, thereby denying the applicant the tariff concession. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, nor are any liabilities imposed on these persons in respect of actions taken or omitted before the TCO's effective date (subsection 269S(1)). The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).