EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923920
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 pet food fork and covers on 08 July 2009.
Instrument
TCO No 0923920 was made on 25 September 2009. It declares that those certain pet food fork and covers 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. 0923920 is taken to have come into force on 08 July 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. 0923920, enacted in 2009, is an instrument under the Customs Act 1901, which was designed to address the need for tariff concessions for specific goods. The Customs Act 1901 provides a scheme whereby the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that result in a lower rate of customs duty for certain goods. This legislative instrument was introduced to streamline the process of applying for tariff concessions and to ensure that the criteria for such concessions are met. The policy objective is to facilitate the import of goods that are not produced domestically in a substitutable form, thereby supporting the market and potentially lowering costs for consumers. The instrument was enacted by the relevant legislature and is designed to ensure that the application process is transparent and allows for public submissions before a decision is made by the CEO.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities seeking a tariff concession for goods, where the application must meet core criteria such as the absence of substitutable goods produced in Australia. The TCO process involves an application by the interested party to the CEO, who then determines if the application meets the criteria set by sections 269C, 269B, and 269D of the Act, which define key terms such as "substitutable goods" and "ordinary course of business". If the CEO is satisfied that the application meets the criteria, they issue a written order that effectively grants a tariff concession on the specified goods, as demonstrated in TCO No. 0923920 for certain pet food forks and covers, which resulted in a reduction of the duty rate from 5% to free. The geographic reach of this legislation is national, and it extends to all goods not explicitly excluded by section 269SJ of the Act. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for TCO No. 0923920. The TCO does not retroactively affect the rights of any person and does not impose new liabilities, ensuring that only future transactions benefit from the tariff concession.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) are sections 269F, 269C, 269B, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". Section 269P(3) requires the CEO to make a written order (TCO) if satisfied that the application meets the core criteria.
Under this TCO, McPherson's Consumer Products applied for a tariff concession on certain pet food forks and covers on 8 July 2009. The CEO was satisfied that no substitutable goods were produced in Australia, so the CEO made a TCO on 25 September 2009 declaring that these goods are subject to a zero rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. This means importers of these goods will no longer pay the general 5% duty rate.
The TCO imposes obligations on the CEO to assess TCO applications against the core criteria and make a written order if satisfied. It also requires the CEO to publish a notice in the Gazette inviting submissions against the TCO and consider any submissions received. The TCO itself does not impose any obligations on parties other than to ensure imported goods meet the definitions in the TCO.
Breach of the TCO requirements or failure to comply with the TCO may result in penalties under the Customs Act 1901. The maximum penalty for false or misleading statements in an application for a TCO is $22,200 or three times the value of the goods, whichever is greater. Importers who fail to comply with the TCO conditions may also face penalties under the Customs Act for incorrect or fraudulent importation.