EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922442
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 salt and pepper grinding mills on 30 June 2009.
Instrument
TCO No 0922442 was made on 18 September 2009. It declares that those certain salt and pepper grinding mills 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. 0922442 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 Australian Parliament, serves as the primary legislation governing customs and excise duties in Australia. It establishes a framework within which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This legislative instrument was introduced to address the need for a streamlined process to reduce customs duty on specific goods, thereby facilitating trade and economic efficiency. The explanatory statement for Tariff Concession Instrument No. 0922442, made under this Act, clarifies the procedure for granting tariff concessions on certain goods, such as salt and pepper grinding mills, where no substitutable goods are produced in Australia. The policy objective is to provide relief to importers by reducing the customs duty rate from the general rate of 5% to free, thus promoting trade without imposing any additional liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). These TCOs apply to specific goods for which a lower rate of customs duty is prescribed. Any person can apply to the CEO for a TCO, provided the goods are not those specified in section 269SJ of the Act that cannot be subject to a TCO. The CEO evaluates whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a written order is made, declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a tariff concession. The geographic reach of this legislation is national, as it operates under the purview of the Commonwealth. The CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for TCO No. 0922442 concerning certain salt and pepper grinding mills. The TCO is deemed to come into force on the day the application was lodged, which in this case was 30 June 2009. The TCO does not affect existing rights or impose liabilities on anyone other than the Commonwealth in respect of actions taken prior to its registration. Importers of the affected goods will benefit from the ability to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) (s 269F). When McPherson's Consumer Products applied for a TCO for certain salt and pepper grinding mills on 30 June 2009, they requested a tariff concession, which was subsequently granted (s 269C). The CEO issued TCO No. 0922442 on 18 September 2009, declaring that the mills are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, which sets the duty rate at zero percent (s 269P(3)). This means that these goods will be exempt from the general customs duty rate of 5% and will instead be imported duty-free.
The Act imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure that their application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). The CEO is required to assess whether the application meets these criteria and, if satisfied, must make a written order (s 269P(3)). The CEO must also publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission (s 269K(1)). In this case, no submissions were received. Finally, TCOs do not affect the rights of any person as at the date of registration so as to disadvantage that person or impose liabilities for actions taken before the date of registration (s 269S(1)).
Under the Customs Act 1901, breaches or non-compliance with the Act's provisions can lead to a range of civil and criminal consequences. For instance, knowingly making a false statement or omission in an application for a TCO can result in criminal penalties, including fines and imprisonment (s 269T). The maximum penalty for such an offence is 20 penalty units, which is currently equivalent to AUD 2,200. Additionally, the Act provides for the imposition of administrative penalties for non-compliance with the Act's provisions, including fines for making incorrect declarations or failing to comply with reporting requirements (s 269U). The specific penalties for these administrative penalties are not detailed in the Act but are determined by the relevant legislation. These provisions ensure that the Act's objectives are met and that the tariff concession scheme operates fairly and effectively.