EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922446
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.
McPerson's Consumer Products applied for a TCO in respect of certain clothes hangers on 30 June 2009.
Instrument
TCO No 0922446 was made on 18 September 2009. It declares that those certain clothes 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. 0922446 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, provides a framework for administering customs and excise in Australia. One of its provisions allows for the creation of Tariff Concession Orders (TCOs) which can reduce the rate of customs duty on certain imported goods. This legislation aims to address the economic imbalance that may arise when imported goods compete with locally produced goods, particularly when no substitutable goods are produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 0922446, issued under the authority of the Act, details the process by which a TCO is granted, including the requirement that the CEO of Customs must be satisfied that no substitutable goods are produced in Australia. The policy objective is to ensure that the concession does not undermine local production and allows for a fair competitive environment for imported goods that do not have local counterparts.
Scope and Application
The Tariff Concession Instrument No. 0922446 applies to goods specified in the instrument, which are certain clothes hangers. The instrument operates under the Customs Act 1901, specifically Part XVA, which governs the process for applying for and granting Tariff Concession Orders (TCOs). The CEO of Customs has the authority to make these orders, which reduce the rate of customs duty applicable to specified goods. The instrument applies to McPerson's Consumer Products, who applied for the concession on 30 June 2009. This TCO was made on 18 September 2009, and it exempts the specified clothes hangers from the general customs duty rate of 5%, making the duty rate free. The instrument has a national jurisdictional reach as it is an instrument under the Commonwealth Customs Act. There are no exclusions or exemptions specified within this particular instrument, although section 269SJ of the Act excludes certain goods from being subject to a TCO. The instrument’s application may be further defined or extended through subordinate instruments, although none are specified in this instance.
Key Provisions
The Customs Act 1901, particularly Part XVA, details the process for Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on certain goods. Under section 269F, an application for a TCO can be made to the Chief Executive Officer of Customs (CEO), provided the goods in question are not those specified in section 269SJ, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, and that no substitutable goods were produced in Australia on the day the application was lodged (as defined in sections 269D and 269E), a TCO can be issued. This TCO specifies the reduced duty rate applicable to the goods, as outlined in Schedule 4 of the Customs Tariff Act 1995.
Entities or individuals applying for a TCO must ensure their application is valid and meets the criteria set by the Act. The CEO is mandated to publish a notice in the Gazette once an application is accepted, inviting any objections or submissions from interested parties, as stipulated in subsection 269K(1). In this instance, no submissions were received in response to the notice for TCO No. 0922446, which concerned certain clothes hangers. The TCO becomes effective on the day the application was lodged, as per subsection 269S(1). Consequently, for TCO No. 0922446, this date is 30 June 2009.
In terms of legal obligations, the Act imposes several requirements on the parties involved. The CEO must assess the application against the core criteria and ensure that the goods in question are not substitutable by any produced in Australia. The applicant must provide sufficient evidence to substantiate their application. Furthermore, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, meaning any pre-existing rights or liabilities remain unchanged. Importers can benefit from this by applying for duty refunds on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
Breaches of the provisions in the Customs Act 1901, including improper applications for TCOs, can result in both civil and criminal consequences. While the specific penalties for such breaches are not detailed in the explanatory statement, they could range from fines to imprisonment, depending on the nature and severity of the violation. The Act does not specify maximum penalties in this context but generally, breaches of customs regulations can lead to significant legal repercussions.