EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933953
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.
McPhersons Consumer Products applied for a TCO in respect of certain household sets on 11 September 2009.
Instrument
TCO No 0933953 was made on 27 November 2009. It declares that those certain household sets 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. 0933953 is taken to have come into force on 11 September 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, establishes a framework for the application and administration of customs duties in Australia. Specifically, Part XVA of the Act provides for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Tariff Concession Instrument No. 0933953, introduced in 2009, addresses the issue of applying tariff concessions to specific imported goods under certain conditions. This instrument aims to provide relief from customs duties for goods that are not produced domestically and for which no substitutable goods are produced in Australia. The process involves McPhersons Consumer Products applying for a TCO, which the CEO assessed and approved, resulting in a concession that exempts certain household sets from the general duty rate of 5%, setting their duty rate to free instead. The instrument ensures that no adverse effects arise for existing rights or liabilities prior to its enactment.
Scope and Application
The Tariff Concession Instrument No. 0933953 under the Customs Act 1901 applies to the specific goods identified in the application by McPhersons Consumer Products, which are certain household sets. This Act facilitates the granting of tariff concession orders (TCOs) by the Chief Executive Officer of Customs, providing a lower rate of customs duty on goods specified in a TCO. The legislation targets individuals or entities applying for such tariff concessions, and it applies to transactions involving the importation of these specified goods into Australia. The geographic and jurisdictional reach of this legislation is national, as it is an instrument of the Commonwealth of Australia. The Act excludes goods specified in section 269SJ, which are those goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which provides the prescribed rates of duty outlined in the TCO.
Key Provisions
The Customs Act 1901, under Part XVA, outlines the process through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). A Tariff Concession Order allows for a reduced rate of customs duty on specified goods. Section 269F allows an individual or entity to apply to the CEO for a TCO regarding certain goods. The CEO must assess whether the application is valid, considering that certain goods specified in section 269SJ cannot be subject to a TCO. If the CEO determines that the application is valid and does not concern goods listed in section 269SJ, they must then decide if the application meets the core criteria stipulated in section 269C. This section mandates that no substitutable goods should be produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations under the Act for the CEO include verifying the validity of the application, determining whether the goods in question meet the core criteria, and publishing a notice in the Gazette inviting any objections to the TCO. If no objections are received, the CEO must issue a TCO if the application meets the criteria. In the case of McPhersons Consumer Products, the CEO issued TCO No. 0933953 on 27 November 2009, applying a zero rate of duty to certain household sets as no substitutable goods were produced in Australia.
Should any party breach the provisions of the Customs Act 1901 or associated regulations, they may face civil or criminal penalties. The severity of the penalty depends on the nature and extent of the breach. For instance, knowingly making a false statement in an application for a TCO could lead to a civil penalty of up to $22,200 or a criminal penalty that may result in imprisonment. These penalties are designed to ensure compliance with the Act and to protect the integrity of the tariff concession scheme.