EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933956
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 pans on 11 September 2009.
Instrument
TCO No 0933956 was made on 27 November 2009. It declares that those certain pans 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. 0933956 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 Tariff Concession Instrument No. 0933956, enacted under the Customs Act 1901, addresses the need to provide tariff concessions on specific goods to encourage their importation and production within Australia. This legislation allows the Chief Executive Officer of Customs to make Tariff Concession Orders, which can reduce or eliminate customs duty on certain goods, provided no substitutable goods are produced in Australia. The instrument was introduced by the Parliament of Australia to address gaps in the tariff system, ensuring that Australian consumers and businesses can access essential goods at reduced costs while also encouraging local production where feasible. The policy objective is to provide a streamlined process for applying for tariff concessions, ensuring that the decision-making process is transparent and allows for public input. This approach helps balance the interests of domestic producers and consumers by potentially lowering the cost of imported goods while safeguarding the domestic industry against unfair competition from imported goods that could easily replace locally produced alternatives.
Scope and Application
The Tariff Concession Instrument No. 0933956 under the Customs Act 1901 applies to specific goods, namely certain pans, which McPhersons Consumer Products sought tariff concessions for. The instrument is applicable to the person or entity that applied for the tariff concession, which in this case is McPhersons Consumer Products. The application of the instrument is limited to the particular goods for which the concession was requested and approved, and it does not extend to other goods or entities. The geographic reach of this instrument is nationwide as it falls under the Commonwealth's customs regulations. The instrument operates under the core criteria outlined in the Customs Act, specifically ensuring that no substitutable goods were produced in Australia at the time of the application. The instrument does not specify any exclusions or exemptions other than those outlined in section 269SJ of the Act, which generally prohibits certain goods from being subject to a tariff concession order. The instrument’s effect is limited to the goods specified and does not impose any liabilities or affect the rights of any persons other than the Commonwealth concerning activities prior to the instrument’s effective date.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269SJ, 269P, and 269K. Section 269F permits a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. The application process involves the CEO determining whether the application meets the core criteria, which is defined in section 269C as the absence of substitutable goods produced in Australia on the day the application is lodged. This requirement is further clarified in sections 269B and 269D, which define terms such as 'goods produced in Australia' and 'ordinary course of business'. If the CEO is satisfied that the application meets these criteria, they must issue a written order as a TCO, as stipulated in section 269P(3).
The Act imposes several obligations on the CEO, including the requirement to decide whether an application meets the core criteria and, if so, to issue a TCO. Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must also consider any submissions received. In the case of TCO No. 0933956, the CEO did not receive any submissions.
Regarding the obligations on the applicants, they must ensure their application for a TCO is lodged in accordance with the Act and provides all necessary information to demonstrate that no substitutable goods are produced in Australia. McPhersons Consumer Products, for instance, successfully applied for a TCO for certain pans by demonstrating that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0933956.
Offences and penalties are not explicitly mentioned in the provided text, but non-compliance with the requirements of the Act or the TCO could potentially lead to civil or criminal consequences, depending on the specific nature of the breach. The maximum penalties for breaches of the Customs Act 1901 can include substantial fines and, in some cases, imprisonment. The Customs Tariff Act 1995 and associated regulations may also have specific penalties for non-compliance related to duty refunds and other obligations. The TCO itself does not impose any liabilities on any person, as clarified in the explanatory statement.