EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922437
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.
McPherson's Consumer Products applied for a TCO in respect of certain pasta measurers on 30 June 2009.
Instrument
TCO No 0922437 was made on 18 September 2009. It declares that those certain pasta measurers 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. 0922437 is taken to have come into force on 30 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 Tariff Concession Instrument No. 0922437 was enacted in 2009 as an instrument under the Customs Act 1901. This legislative instrument was introduced to address the need for tariff concessions on specific imported goods that do not have substitutable Australian-made alternatives. The Customs Act 1901 allows for the Chief Executive Officer of Customs to grant tariff concession orders, reducing the customs duty on particular goods to zero if no substitutable goods are produced in Australia. The policy objective of this instrument is to support the competitiveness of Australian industries by providing tariff relief on imported goods where there is no Australian-made equivalent, thus facilitating trade and potentially lowering costs for consumers. The instrument was enacted by the relevant authorities within the Australian government, ensuring that the legislative changes were in line with broader trade policy objectives.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to specific goods for which an application has been made and approved, resulting in a lower rate of customs duty for the goods specified in the order. This legislative mechanism primarily affects entities and individuals involved in the importation of goods that qualify for tariff concessions, facilitating their access to preferential duty rates. The scope of the Act is national, extending across all jurisdictions within Australia, as it is a Commonwealth Act. However, the Act excludes goods specified in section 269SJ, which lists items ineligible for tariff concessions, such as those that could potentially be produced domestically. Additionally, the application process includes public consultation, as mandated by the Act, to ensure transparency and allow stakeholders to voice any concerns regarding the concession. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect the rights or impose liabilities on any party other than the Commonwealth, thus safeguarding existing importer rights and ensuring clarity on duty obligations.
Key Provisions
Section 269C of the Customs Act 1901 establishes the core criteria that an application for a Tariff Concession Order (TCO) must meet. For an application to be considered valid, it must be demonstrated that, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. This definition of "substitutable goods" is critical, as it means goods produced in Australia that could serve the same purpose as the goods for which the tariff concession is being sought. Section 269D clarifies what constitutes "goods produced in Australia," while section 269E defines "ordinary course of business." If the Chief Executive Officer (CEO) of Customs determines that the application meets these core criteria, they are mandated to issue a written TCO under section 269P(3) of the Act.
The obligations imposed on applicants and the CEO under this legislation are quite specific. Applicants, such as McPherson's Consumer Products, must ensure that their applications are thorough and include all necessary documentation to demonstrate that no substitutable goods are being produced in Australia. They must also be prepared to provide any additional information the CEO may require. On the other hand, the CEO is obligated to evaluate each application against the core criteria and, if satisfied, issue a TCO promptly. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be granted. In the case of McPherson's Consumer Products, no objections were received.
Failure to comply with the requirements of the Customs Act 1901 can lead to significant consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of customs regulations can result in substantial fines and, in severe cases, criminal charges. For instance, if an entity falsely claims that no substitutable goods are being produced in Australia to secure a tariff concession, they could be subject to penalties under the Act. These could include financial penalties or even imprisonment, depending on the severity of the breach. Moreover, any misrepresentation or fraudulent activity in the application process could lead to further civil or criminal actions.