EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922444
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 piping bags on 30 June 2009.
Instrument
TCO No 0922444 was made on 18 September 2009. It declares that those certain piping bags 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. 0922444 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. 0922444 was enacted in 2009 under the Customs Act 1901 to address the need for tariff concessions on specific goods, thereby promoting trade efficiency and supporting businesses. This instrument was introduced by the Commonwealth Parliament to streamline the process for applying lower rates of customs duty on certain imported goods, provided no substitutable goods were produced domestically. The policy objective is to facilitate trade by reducing the cost of imported goods through tariff concessions, as long as it does not adversely affect domestic production or impose new liabilities on individuals or entities. The instrument was applied to certain piping bags, for which the general customs duty rate was reduced to free, effective from the date of the application, 30 June 2009.
Scope and Application
The Tariff Concession Instrument No. 0922444 under the Customs Act 1901 provides a specific mechanism for granting tariff concessions on certain goods, in this case, piping bags, by reducing the applicable customs duty to free. This legislation applies to any person or entity that applies for such a concession and to the goods specified in the application, provided the application meets the core criteria stipulated under the Act. The geographic reach of this legislation is national, applying across Australia as it is part of the Commonwealth’s customs regime. The application of the Act is restricted to goods that are not specified in section 269SJ of the Act, which excludes certain items from tariff concessions. The process involves an application to the Chief Executive Officer of Customs, who must be satisfied that no substitutable goods are produced in Australia before making a Tariff Concession Order (TCO). This Instrument No. 0922444 was made on 18 September 2009, and it effectively reduces the customs duty rate from 5% to free for the specified piping bags, benefiting importers who can now apply for refunds of duty paid on these goods since 30 June 2009. The application of this Act can be further extended or modified through subordinate instruments, allowing for adjustments to the categories of goods eligible for tariff concessions.
Key Provisions
The Tariff Concession Instrument No. 0922444, under the Customs Act 1901, specifically addresses the application for Tariff Concession Orders (TCOs) (sections 269F and 269P(3)). When an entity like McPherson's Consumer Products applies for a TCO, the Chief Executive Officer of Customs (CEO) must assess the application against the core criteria, particularly focusing on whether substitutable goods are produced in Australia (section 269C). If the CEO determines that no such goods are produced, they are required to issue a TCO. In this instance, the CEO made TCO No. 0922444 on 18 September 2009, applying to certain piping bags with a reduced customs duty rate from 5% to free (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by this Act on parties such as McPherson's Consumer Products include ensuring that their applications for TCOs are made in accordance with the stipulated criteria. McPherson's Consumer Products must have demonstrated that the piping bags in question did not have substitutable goods produced in Australia. Additionally, the CEO has a duty to publish notices inviting public submissions on TCO applications (subsection 269K(1)). This transparency measure ensures that all relevant parties have an opportunity to voice any objections or concerns regarding the proposed concession.
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. While the explanatory statement does not explicitly detail specific offences, penalties, or civil/criminal consequences for breaches related to TCOs, the overarching framework of the Act suggests that non-compliance could potentially lead to legal action. The CEO’s decision to issue a TCO is subject to judicial review, and any irregularities or improper applications might be subject to penalties as outlined in the broader Customs Act provisions. In cases where a TCO is issued erroneously, the CEO may face scrutiny, and the affected parties could be required to repay any undue concessions received.