EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923927
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 zesters household tools on 08 July 2009.
Instrument
TCO No 0923927 was made on 18 September 2009. It declares that those certain zesters household tools 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. 0923927 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. 0923927, enacted under the Customs Act 1901, was introduced to address the need for a more streamlined process for tariff concessions on specific goods, allowing for a lower rate of customs duty. This was achieved through the application of Tariff Concession Orders (TCOs), which can be applied for by individuals or entities and must be approved by the Chief Executive Officer of Customs (CEO) if they meet the core criteria. The primary objective of this instrument, as stated in the explanatory statement, is to ensure that the application of a TCO does not disadvantage existing producers or impose new liabilities, while potentially benefiting importers by allowing them to apply for a refund of duties paid on goods imported since the TCO's effective date. McPherson's Consumer Products' application for a TCO on certain zesters household tools exemplifies this process, resulting in these tools being subject to a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any individual or entity seeking to reduce the customs duty on specified goods through a TCO, provided these goods are not restricted by section 269SJ and meet the core criteria outlined in section 269C. A TCO application is considered valid if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. The Act has a national reach within Australia, affecting the importation of goods and the duties applicable to them. The legislation does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date, as per subsection 269S(1). The application of the Act can be extended or modified through subordinate instruments, allowing for adjustments to the tariff concessions and their criteria.
Key Provisions
The key provisions of Tariff Concession Order No. 0923927 (TCO 0923927) under the Customs Act 1901 (the Act) allow for a concession on the customs duty for certain household tools. Section 269C of the Act sets out that for a Tariff Concession Order (TCO) to be valid, the applicant must demonstrate that, at the time of the application, no substitutable goods are produced in Australia. A substitutable good, as defined in section 269D of the Act, is a product that could serve the same purpose as the goods in question. Once the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they are required under section 269P(3) of the Act to make a written TCO. This TCO then declares the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. For TCO 0923927, certain zester household tools are subject to item 50 of Schedule 4, granting these goods a duty-free status, whereas the general rate of duty is 5%.
The Act imposes several obligations on both the applicant and the CEO. The applicant must ensure their application is valid, which involves demonstrating that no substitutable goods are produced in Australia. The CEO, on receiving the application, must assess it against the core criteria and, if satisfied, make a written TCO. Additionally, the CEO must publish a notice in the Gazette under subsection 269K(1) of the Act, inviting submissions from any interested parties who may oppose the making of the TCO. In this case, no submissions were received.
Failure to comply with the provisions of the Act can result in civil or criminal consequences. While the Explanatory Statement does not specify maximum penalties, breaches of the Act or its regulations may lead to fines or other legal repercussions depending on the severity and nature of the breach. For example, providing false information in an application could lead to penalties under the Act or other relevant legislation.
In summary, TCO 0923927 applies to certain zester household tools, granting them a duty-free status. The Act mandates that the CEO assess applications against strict criteria, publish notices inviting submissions, and make written orders if the criteria are met. The rights of importers are positively affected, and the TCO does not impose any liabilities on any person. While the specific penalties for non-compliance are not detailed, breaches could result in fines or other legal consequences.