EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922440
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 carving sets on 30 June 2009.
Instrument
TCO No 0922440 was made on 18 September 2009. It declares that those certain carving 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. 0922440 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, enacted by the Parliament of Australia, addresses the need for tariff concessions on certain imported goods, facilitating trade and economic efficiency. Specifically, Part XVA of the Act establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia. The policy objective is to support Australian consumers and businesses by reducing the cost of imported goods where domestic production is not a viable alternative. In the case of McPherson's Consumer Products, a TCO was granted for certain carving sets on 30 June 2009, resulting in a reduction of duty from 5% to free, effective from the same date. This legislative instrument ensures that the rights of importers are protected and can benefit from duty refunds for imports since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0922440, made under Part XVA of the Customs Act 1901, applies specifically to goods for which a Tariff Concession Order (TCO) has been applied and approved. This process is initiated by an entity or individual, such as McPherson's Consumer Products in this instance, submitting an application to the Chief Executive Officer of Customs (CEO). The application must meet the core criteria outlined in section 269C of the Act, which stipulates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The TCO applies to the specified goods and reduces the customs duty rate to zero, from the general rate of 5%, for the specified carving sets. The geographic and jurisdictional reach of this Act is national, as it operates under the Commonwealth’s authority. No submissions were received opposing the TCO, and it came into effect on the date of the application, 30 June 2009, without retroactive application. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities; however, it does confer benefits to importers who can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, particularly as it pertains to Tariff Concession Orders (TCOs), is a significant legislative framework that governs the concession of customs duties for certain goods. Section 269F (1) of the Act allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ, which outlines goods that cannot be subject to a TCO, they must then assess whether the application meets the core criteria as stipulated in section 269C. Specifically, the CEO must determine whether no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D (goods produced in Australia), section 269E (ordinary course of business), and section 269D again for the definition of 'substitutable goods'.
The obligations imposed by the Act on the parties involved are detailed and specific. Upon receiving a valid TCO application, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO, as per subsection 269K(1) of the Act. If no submissions are received, the CEO proceeds to decide on the application. If satisfied that the application meets the core criteria, the CEO must make a written order under subsection 269P(3) of the Act, declaring that the goods in question are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying the specified rate of duty.
In the case of McPherson's Consumer Products' application for a TCO concerning certain carving sets, TCO No. 0922440 was issued on 18 September 2009. This order declared that the carving sets are subject to item 50 of Schedule 4 to the Tariff, as the CEO was satisfied that no substitutable goods were produced in Australia. The general duty rate for these goods is 5%, but the rate for the goods subject to the TCO is free. The TCO came into effect on 30 June 2009, the day the application was lodged, in accordance with subsection 269S(1) of the Act. Importantly, the TCO does not affect the rights of any person, except for the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the registration date, as outlined in the explanatory statement.
Failure to comply with the provisions of the Customs Act 1901, particularly in relation to TCOs, may result in civil or criminal consequences. Although the specific offences and penalties are not detailed in the explanatory statement, it is clear that non-compliance could lead to significant legal repercussions. These might include fines, imprisonment, or other penalties as prescribed by relevant legislation, depending on the nature and severity of the breach. The exact penalties would depend on the specific provisions of the Customs Act and any related regulations or subsidiary legislation.