EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933962
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 scrubbing brushes on 11 September 2009.
Instrument
TCO No 0933962 was made on 04 December 2009. It declares that those certain scrubbing brushes 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. 0933962 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. 0933962, enacted in 2009, addresses a gap in the Customs Act 1901 by facilitating tariff concessions for certain goods. This legislation was introduced to provide relief to importers by lowering the customs duty rates on specific goods, in this case, certain scrubbing brushes, thereby making them more competitive in the market. The instrument was enacted by the Chief Executive Officer of Customs (CEO) in accordance with section 269F of the Act, following an application by McPhersons Consumer Products on 11 September 2009. The CEO determined that the application met the core criteria set out in section 269C, as no substitutable goods were produced in Australia at the time of application. The instrument effectively reduces the duty on these scrubbing brushes from 5% to free, and it came into force on the date of the application under the provisions of subsection 269S(1). This legislative action ensures that the rights of importers are beneficially affected and does not impose any liabilities on any person, aligning with the policy objective of fostering a fair and competitive market.
Scope and Application
The Tariff Concession Instrument No. 0933962, issued under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, in this case certain scrubbing brushes, which are now subject to a zero rate of customs duty. This Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for goods not produced in Australia in the ordinary course of business, thereby allowing for a lower customs duty rate. The application process requires the CEO to ensure that the goods in question are not specified in section 269SJ of the Act, which outlines goods ineligible for a TCO, and that they meet the core criteria established by sections 269C, 269B, and 269D of the Act. The application by McPhersons Consumer Products was processed and accepted, resulting in the issuance of the TCO, which came into force on the date of the application, 11 September 2009. The CEO is required to publish notices in the Gazette to allow for public consultation on TCO applications, although in this instance, no submissions were received. The instrument does not retroactively affect the rights of any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0933962 are Section 269F, which outlines the process for applying for a Tariff Concession Order (TCO), and Section 269P(3), which mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must issue a TCO. Section 269C and Section 269B define key terms such as "core criteria," "substitutable goods," and "goods produced in Australia." The instrument was made on 04 December 2009 and declares that certain scrubbing brushes are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods.
The Act imposes several obligations on the parties involved. Firstly, applicants like McPhersons Consumer Products must ensure that their application meets the core criteria, as defined by Section 269C and Section 269B. Secondly, the CEO of Customs is required to review applications and determine if they meet the criteria for a TCO. Subsection 269K(1) also mandates that the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be granted. In this case, no submissions were received.
In terms of potential breaches and consequences, the Act does not explicitly outline offences or penalties for failing to comply with the provisions of a TCO. However, non-compliance with the Customs Act 1901 or the Customs Tariff Act 1995 in general could lead to civil or criminal penalties. For instance, under Section 207 of the Customs Act, wilful or negligent breaches can result in fines and imprisonment. The maximum penalties for these breaches can vary, but they may include fines of up to $22,200 for individuals and $111,000 for corporations, as well as imprisonment for up to two years for individuals and five years for corporations. The exact penalties depend on the nature and severity of the breach.