EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923922
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 pets litter scoops on 08 July 2009.
Instrument
TCO No 0923922 was made on 18 September 2009. It declares that those certain pets litter scoops 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. 0923922 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. 0923922 was enacted in 2009 under the Customs Act 1901 to address the problem of ensuring that imported goods, in this case certain pet litter scoops, are subject to preferential tariff rates when there are no Australian-made alternatives. This instrument was developed to provide relief to importers and consumers by reducing the customs duty on specific goods, thereby making them more affordable. The Customs Act 1901, enacted by the Australian Parliament, facilitates this scheme through Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs. The policy objective underpinning this instrument is to promote fair trade practices by ensuring that Australian consumers benefit from lower tariffs on goods where no domestic alternatives exist, thus encouraging competition and potentially stimulating local production in the long term.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) mechanism, facilitates tariff concessions for certain goods that are subject to application and approval by the Chief Executive Officer of Customs (CEO). This applies to entities or individuals seeking reduced customs duty on specific goods not produced in Australia in the ordinary course of business. The scope of the Act encompasses the application process, core criteria assessment, and the issuance of TCOs by the CEO, who ensures that no substitutable goods are produced domestically. The geographic reach of the Act is national, as it applies across Australia and is governed by federal legislation. The Act does not impose any liabilities on individuals or entities and ensures that the rights of importers are advantageously affected by allowing them to apply for refunds of duties paid on goods imported since the TCO came into force. The application of the Act is further extended through subordinate instruments, which may include regulations and orders that specify detailed procedural and operational aspects of the tariff concession scheme.
Key Provisions
The key operative sections of this legislation concern the making and effects of a Tariff Concession Order (TCO). Section 269F (1) of the Customs Act 1901 allows for an application to the Chief Executive Officer of Customs (the CEO) for a TCO, provided the goods in question are not those specified in section 269SJ. If the application is deemed valid, the CEO must determine if it meets the core criteria under section 269C. The core criteria are satisfied if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the application meets these criteria, the CEO must issue a written TCO under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question.
The obligations imposed on the parties by this Act include the requirement for applicants to ensure that their applications for TCOs meet the core criteria, particularly that no substitutable goods were produced in Australia in the ordinary course of business on the day the application is lodged. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not be made, as per section 269K(1). In this case, no submissions were received. The TCO itself does not disadvantage any person other than the Commonwealth and does not impose any liabilities on anyone for actions taken before the TCO’s effective date.
In terms of potential consequences for breach, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the failure to comply with the TCO provisions. However, breaches of customs regulations generally can result in penalties, including fines and imprisonment. For instance, under section 237 of the Act, a person who knowingly imports goods in contravention of the Act can be liable to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Similar penalties apply for offences related to the making of false statements or the provision of false documents to the CEO. Therefore, while the specific sections of this Act do not detail penalties, the broader framework of the Customs Act suggests that non-compliance could result in significant civil or criminal consequences.