EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922438
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 barbecue sets on 30 June 2009.
Instrument
TCO No 0922438 was made on 18 September 2009. It declares that those certain barbecue sets 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. 0922438 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 Customs Act 1901, as amended, introduced a mechanism through which the Chief Executive Officer of Customs could grant Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods. This was enacted to address the gap in the tariff system by providing relief for specific goods, ensuring they were not subject to prohibitive duties if they could not be produced domestically. The Tariff Concession Instrument No. 0922438, issued under the authority of the Customs Act, was specifically designed to provide tariff concessions on certain barbecue sets, reducing their duty from the general rate of 5% to free. The instrument was made on 18 September 2009 and is considered to have come into force on 30 June 2009, the date the application was lodged. The policy objective is to ensure that the concessions do not disadvantage any person other than the Commonwealth and do not impose new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0922438 under the Customs Act 1901 provides for the concession of customs duty on certain barbecue sets applied for by McPherson's Consumer Products. The Act applies to any entity or person seeking a tariff concession order (TCO) for goods specified in an application to the Chief Executive Officer of Customs, provided the goods do not fall under the exclusions set out in section 269SJ. The application process requires that, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. The CEO must make a written order if the application meets these criteria. The TCO applies to the barbecue sets specified in the application and was made effective from 30 June 2009, the date of application. The geographic and jurisdictional reach of the Act is Commonwealth-wide, and the TCO does not disadvantage any person or impose liabilities except on the Commonwealth. The TCO can be extended or restricted through subordinate instruments, although no such actions are mentioned in this instance.
Key Provisions
The main operative sections of the Customs Act 1901, as evidenced in Tariff Concession Instrument No. 0922438, include sections 269C, 269F, 269P, and 269SJ. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application is not for goods specified in section 269SJ, which cannot be subject to a TCO, the CEO must determine if it meets the core criteria outlined in section 269C. This core criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in section 269D and 269E. If these conditions are met, the CEO is obligated to make a written TCO, as per section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The Act imposes several obligations on the parties and entities it governs. Firstly, any entity wishing to apply for a TCO must ensure their application complies with the statutory requirements and that the goods in question are not excluded under section 269SJ. The CEO must then assess whether the application meets the core criteria by verifying the absence of substitutable goods produced in Australia as per sections 269D and 269E. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions on the proposed TCO, as stipulated in section 269K(1). This transparency measure ensures that any objections or submissions can be considered before the TCO is finalised.
Failure to adhere to the provisions of the Customs Act 1901 and the associated Tariff Concession Instrument No. 0922438 can result in significant legal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally carry severe penalties. For instance, under section 282 of the Customs Act 1901, penalties can include fines up to a substantial amount and potential imprisonment. Additionally, the CEO may impose civil penalties for non-compliance, which can further exacerbate the financial and legal repercussions for any entity found to be in breach of the Act's provisions.
In summary, Tariff Concession Instrument No. 0922438 outlines the process for applying for and granting a Tariff Concession Order under the Customs Act 1901. It mandates specific criteria that must be met for a TCO to be issued and imposes certain obligations on applicants and the CEO. Non-compliance with the Act can lead to significant civil and criminal penalties, underscoring the importance of adhering to the statutory requirements.