EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918481
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.
Unilever Australasia applied for a TCO in respect of certain showering tools on 01 June 2009.
Instrument
TCO No 0918481 was made on 21 August 2009. It declares that those certain showering tools 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. 0918481 is taken to have come into force on 01 June 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the application of customs duties on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on specified goods. The introduction of TCOs aims to address the need to provide tariff relief to importers where certain goods are not produced domestically and thus cannot be substituted with locally produced alternatives. This legislative instrument, Tariff Concession Instrument No. 0918481, was made under the authority of the Customs Act to provide relief for specific showering tools by Unilever Australasia, reducing the duty on these goods from 5% to free. The instrument was enacted without any public submissions opposing the concession, thereby maintaining the policy objective of providing tariff relief where appropriate.
Scope and Application
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on specified goods, subject to certain criteria. These orders apply to goods that are the subject of a valid application where no substitutable goods are produced in Australia in the ordinary course of business. The application process requires the CEO to assess whether the application meets the core criteria, which includes determining if the goods are not specified in section 269SJ of the Act as ineligible for a TCO and if no substitutable goods are produced in Australia. The TCO applies to the specific goods mentioned in the order and is effective from the date the application was lodged. This legislative framework ensures that the concessions are granted in a manner that does not disadvantage existing rights or impose new liabilities on non-Commonwealth entities. The Tariff Concession Instrument No. 0918481, for example, was issued to Unilever Australasia for certain showering tools, reducing the duty on these goods from 5% to free, effective from the date of application, 1 June 2009.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, focus on the process and criteria for making Tariff Concession Orders (TCOs) (sections 269F, 269C, 269B, 269D, 269E, and 269P). Under section 269F, any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods. If the application meets the core criteria set out in sections 269C and 269B, the CEO must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made (subsection 269K(1)).
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that their application meets the criteria outlined in the Act, particularly that no substitutable goods are being produced in Australia in the ordinary course of business on the day the application is lodged. The CEO, once satisfied with the application, is required to make a written order and publish a notice in the Gazette to allow for public submissions. The CEO must also decide whether to proceed with the TCO based on the criteria in sections 269C and 269B, which include definitions of terms like 'substitutable goods' and 'ordinary course of business'.
Should any party fail to comply with the requirements of the Act, there are potential consequences. While the explanatory statement does not detail specific penalties, the Act itself likely includes provisions for enforcement and penalties for non-compliance, which could range from fines to other administrative actions. The obligations to make a written order and publish a notice in the Gazette are critical to ensuring transparency and allowing for public input, thereby maintaining the integrity of the tariff concession process.