EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937098
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 Consumer Products applied for a TCO in respect of certain salt and pepper shakers on 01 October 2009.
Instrument
TCO No 0937098 was made on 30 December 2009. It declares that those certain salt and pepper shakers 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. 0937098 is taken to have come into force on 01 October 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. 0937098, enacted under the Customs Act 1901, addresses the need for tariff concessions to be applied to specific goods where no substitutable goods are produced in Australia. This legislative instrument was introduced by the Chief Executive Officer of Customs, who is responsible for making Tariff Concession Orders (TCOs) when applications are made and approved. The primary policy objective is to facilitate the importation of goods by applying lower rates of customs duty, thereby supporting Australian businesses and consumers by making imported goods more affordable. In this particular instance, McPherson Consumer Products applied for a TCO for certain salt and pepper shakers, which was granted on 30 December 2009, effective from 1 October 2009. The TCO resulted in these specific goods being subject to a free rate of duty, down from the general rate of 5%, which benefits importers by allowing them to apply for a refund of duty on goods imported since the commencement date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0937098 under the Customs Act 1901 applies specifically to certain salt and pepper shakers for which McPherson Consumer Products applied for a tariff concession on 01 October 2009. This instrument is applicable to the goods specified in the application, which must meet the core criteria outlined in the Act. The instrument's geographic reach is national, as it pertains to the application of the Customs Act 1901 across Australia. The instrument is effective from the date the application was lodged, 01 October 2009, and applies a concessional duty rate of free, as opposed to the general rate of 5%, for the specified goods. The CEO of Customs must ensure that the application meets the criteria that no substitutable goods were produced in Australia on the day the application was lodged. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. It also allows for the refund of duty for importers of these goods from the date the TCO came into force.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs), as outlined in sections 269C, 269B, 269D, 269E, and 269P(3). These provisions allow for a lower rate of customs duty on goods that are the subject of a TCO. If a person applies for a TCO in respect of goods, as permitted under section 269F, the CEO must determine whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO, as stated in subsection 269P(3). For instance, McPherson Consumer Products applied for a TCO for certain salt and pepper shakers on 1 October 2009, and TCO No. 0937098 was issued on 30 December 2009, declaring these goods to be subject to a free rate of duty.
The Act imposes several obligations on the CEO and applicants. Under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission. In this case, no submissions were received in response to the published notice. Furthermore, under subsection 269S(1), a TCO is deemed to come into force on the day the application for the TCO was lodged. TCO No. 0937098 is considered to have come into force on 1 October 2009. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration, as per the explanatory statement.
Under the Customs Act 1901, breaches of the provisions related to TCOs could lead to various consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breaches, the Act generally allows for enforcement actions against those who do not comply with its provisions. In the context of customs and tariffs, non-compliance could result in financial penalties, legal action, or other administrative consequences as determined by the relevant authorities. The specific penalties would depend on the nature and severity of the breach, as well as any applicable regulations or guidelines.