EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922445
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 picture hangers on 30 June 2009.
Instrument
TCO No 0922445 was made on 25 September 2009. It declares that those certain picture hangers 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. 0922445 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, provides a framework for the imposition and collection of customs duties. A notable feature of this Act is the scheme for Tariff Concession Orders (TCOs), which allows the Chief Executive Officer of Customs to reduce the rate of customs duty on certain imported goods. The problem this scheme addresses is the facilitation of access to goods that are not produced in Australia, thereby protecting domestic industries from unfair competition while also potentially lowering costs for consumers. The Tariff Concession Instrument No. 0922445, which came into effect on 30 June 2009, is an example of how this scheme operates in practice. McPherson's Consumer Products successfully applied for a TCO for specific picture hangers, resulting in a duty-free status for these goods, provided no substitutable goods were being produced in Australia. This particular instrument exemplifies the Act's objective to streamline the importation process for goods where domestic alternatives do not exist, thereby supporting both economic efficiency and consumer interests.
Scope and Application
The Tariff Concession Instrument No. 0922445, under the Customs Act 1901, applies to the goods specified in the instrument, namely certain picture hangers. It is targeted at entities involved in the importation of these goods, aiming to provide tariff concessions by reducing or eliminating customs duty. The instrument’s scope is confined to the goods mentioned and does not apply to other goods or industries. Geographically, it applies nationally as part of the Commonwealth’s customs legislation, affecting all importers across Australia. The application of the instrument is subject to the core criteria specified in the Act, particularly ensuring that no substitutable goods are produced in Australia at the time of the application. Any exclusions are those specified in section 269SJ of the Customs Act, which lists goods that cannot be subject to a TCO. The instrument does not disadvantage any person by affecting rights as of the date of registration nor does it impose liabilities on persons for actions taken prior to the registration date. Instead, it provides benefits to importers by potentially allowing them to apply for a refund of duty paid on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation (section 269P(3) and 269C) establish the conditions under which the Chief Executive Officer of Customs (the CEO) can make a Tariff Concession Order (TCO). If an application for a TCO is made under section 269F, and the CEO is satisfied that the application meets the core criteria (section 269C), which includes that no substitutable goods were produced in Australia in the ordinary course of business, the CEO is required to make a written order (section 269P(3)) declaring that the goods subject to the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This instrument, TCO No 0922445, specifically declares that certain picture hangers are subject to a 5% duty rate, down from the general rate.
The obligations imposed by this Act on the parties it governs include the requirement for applicants to ensure their applications meet the core criteria. For the CEO, the obligations include accepting valid applications, considering submissions (if any), and making a TCO if the criteria are met. The CEO must also publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)) and ensure that the rights of non-Commonwealth persons are not adversely affected by the TCO.
Breach of the requirements or obligations under this Act could result in civil or criminal consequences, although specific penalties are not outlined in this explanatory statement. The Act does not specify penalties for non-compliance, but breaches of related customs laws typically incur penalties such as fines or imprisonment. The absence of submissions against the TCO in this case suggests that the process was transparent and that no adverse impacts on third parties were identified.
In summary, this legislation facilitates tariff concessions for certain goods by establishing a clear process for application, assessment, and approval by the CEO. The obligations on applicants and the CEO are designed to ensure that tariff concessions are granted fairly and in accordance with the criteria set out in the Act. While the specific consequences of non-compliance are not detailed here, adherence to the process is critical to avoid potential penalties.