EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937100
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 clearing sink or bath outlet plungers on 01 October 2009.
Instrument
TCO No 0937100 was made on 30 December 2009. It declares that those certain clearing sink or bath outlet plungers 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. 0937100 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. 0937100, enacted in 2009, addresses the issue of applying tariff concessions on specific goods under the Customs Act 1901. This instrument was introduced to provide relief by reducing customs duty on certain goods, thereby encouraging trade and providing economic benefits. The instrument is an outcome of the process outlined in Part XVA of the Customs Act 1901, where the Chief Executive Officer of Customs evaluates applications for Tariff Concession Orders (TCOs) to ensure that the goods in question are not produced in Australia and are substitutable. McPhersons Consumer Products successfully applied for a TCO on clearing sink or bath outlet plungers, which resulted in the reduction of the duty rate from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The enactment of this instrument ensures that the policy objective of facilitating trade by lowering the customs duty on specific goods is achieved without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to persons and entities seeking a reduction in customs duty on goods by applying for a TCO. The application process is regulated under section 269F of the Act, whereby an individual or company must apply to the CEO for a TCO for specific goods. Provided the goods are not listed in section 269SJ, which excludes certain goods from TCO eligibility, the CEO will evaluate the application against the core criteria outlined in sections 269C, 269B, and 269D. A TCO is issued when it is determined that no substitutable goods are produced in Australia, as stipulated in section 269P(3). The application of this Act is national in scope, impacting all importers within Australia, and the effectiveness of a TCO is governed by the date the application is lodged, as per section 269S(1). The Act does not disadvantage any person other than the Commonwealth and imposes no new liabilities on any individual or entity, ensuring that rights and obligations existing prior to the TCO's effective date remain unchanged.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0937100 include section 269C (269C), which stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) (269P(3)) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, they 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) applies. Specifically, TCO No. 0937100 (section 269P(3)) was made on 30 December 2009 and declares that certain clearing sink or bath outlet plungers are goods to which item 50 of Schedule 4 to the Tariff applies, given that the CEO was satisfied no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%, but the rate of duty for the goods subject to the TCO is free.
The Act imposes several obligations on the parties involved. The CEO must, as soon as practicable after accepting a TCO application as a valid application, publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1) (269K(1))). McPhersons Consumer Products, the applicant, must ensure their application meets the core criteria as outlined in section 269C (269C) of the Act. The CEO is required to make a decision on whether to grant the TCO based on the information provided and the criteria specified in the Act (subsection 269P(3) (269P(3))).
The Act also outlines potential consequences for breach. Although the Explanatory Statement does not specify particular offences or penalties, it is implied that non-compliance with the provisions could lead to legal ramifications. The general legal framework under the Customs Act 1901 (the Act) might include fines or other penalties for incorrect or fraudulent applications, and such breaches could also result in civil or criminal consequences depending on the severity and intent behind the breach. The specific maximum penalties are not detailed in the explanatory statement but would typically be found in the relevant sections of the Customs Act 1901 or other associated legislation.