EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922441
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 glass carafe on 30 June 2009.
Instrument
TCO No 0922441 was made on 18 September 2009. It declares that those certain glass carafe 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. 0922441 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 Commonwealth Parliament, provides a framework for the administration of customs duties and the regulation of imports and exports. The Tariff Concession Instrument No. 0922441, introduced to address the specific need for tariff concessions on certain imported goods, was made under the authority of the Customs Act. This instrument, which came into force on 30 June 2009, aims to provide relief from customs duties on particular goods, in this case certain glass carafe, by declaring them subject to a zero rate of duty. The Chief Executive Officer of Customs was satisfied that these goods met the core criteria for tariff concession, as no substitutable goods were produced in Australia. The instrument was made following an application by McPherson's Consumer Products and after no objections were received in response to a notice published in the Gazette. The objective is to facilitate the import of these goods by reducing the financial burden on importers, thereby potentially increasing market availability and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0922441 applies to McPherson's Consumer Products in relation to certain glass carafe and is enacted under the Customs Act 1901. The Act applies to any person or entity that imports goods into Australia and seeks to benefit from a lower rate of customs duty via a Tariff Concession Order (TCO). The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia. The CEO of Customs is responsible for making TCOs if the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO No. 0922441, which came into force on 30 June 2009, reduces the duty on specified glass carafe from 5% to free. The Act mandates consultation with stakeholders before the issuance of a TCO, although in this instance, no submissions were received. The TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken prior to its registration, and it benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P, and 269S, which are found within Part XVA of the Customs Act 1901 (the Act). Section 269C sets out the core criteria that an application for a Tariff Concession Order (TCO) must meet, including the requirement that no substitutable goods were produced in Australia on the day the application was lodged (subsection 269P(3)). Section 269P then mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must issue a written order (a TCO) declaring that the goods specified in the application are subject to a reduced customs duty rate. Section 269S outlines the commencement date of a TCO, which is taken to be the day the application was lodged.
The obligations imposed by this legislation on the parties it governs are largely procedural. McPherson's Consumer Products, the applicant in this instance, must ensure that their application is valid and meets the core criteria set out in the Act. The CEO has the responsibility to review the application, consider any submissions made by interested parties, and decide whether to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed, as stipulated in subsection 269K(1). In this case, the CEO did not receive any submissions opposing the TCO.
The legislation does not explicitly outline offences or penalties for breaches; however, it does establish civil and potential criminal consequences for non-compliance. For instance, if an entity knowingly imports goods that are subject to a TCO without paying the applicable duty, they may be subject to civil penalties under the Customs Act 1901, including fines and the confiscation of the goods. In more serious cases, criminal penalties may apply, such as imprisonment, particularly if the breach is considered deliberate or involves significant financial loss to the Commonwealth. While the specific maximum penalties are not detailed in this legislation, they would be governed by the broader provisions of the Customs Act 1901 and associated regulations.