EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937101
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 covers on 01 October 2009.
Instrument
TCO No 0937101 was made on 11 December 2009. It declares that those certain covers 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. 0937101 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 Customs Act 1901, enacted by the Parliament of Australia, addresses the need for streamlined customs duty concessions for specific goods. This Act provides a framework through which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to reduce customs duty rates on goods that meet certain criteria, thereby facilitating trade and reducing costs for importers. TCO No. 0937101, issued on 11 December 2009, exemplifies this process. The instrument was introduced following an application by McPhersons Consumer Products for certain covers, resulting in a tariff concession that lowered the duty rate from 5% to free. The policy objective of this concession is to benefit importers by reducing their duty costs and ensuring that the rights of other stakeholders are not adversely affected. The instrument came into force on the date of application, 1 October 2009, and no objections were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0937101 applies to the specific goods, in this case certain covers, as requested by McPhersons Consumer Products, and grants them tariff concessions under the Customs Act 1901. The Act applies to any person or entity that seeks a tariff concession order (TCO) for goods that are not produced in Australia in the ordinary course of business, thereby satisfying the core criteria outlined in section 269C of the Act. The geographic reach of this Act is national, as it applies across Australia and is governed by the Commonwealth. The Act explicitly excludes goods specified in section 269SJ, which are ineligible for TCOs. The instrument itself, being subordinate legislation, extends the application of the Customs Act 1901 by specifying the particular goods eligible for tariff concessions and the associated duty rates. The commencement of this TCO aligns with the date the application was lodged, ensuring that any rights or liabilities are calculated from that date forward without retrospective effect.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0937101, pertain to the establishment of Tariff Concession Orders (TCOs) under section 269F, the criteria for these orders as outlined in section 269C, and the authority of the Chief Executive Officer of Customs (CEO) to issue these orders in accordance with subsection 269P(3). Specifically, section 269F allows for an application to be made to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, which includes the absence of substitutable goods produced in Australia as per section 269C, the CEO must then issue a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on parties and entities it governs include the submission of a valid TCO application to the CEO and adherence to the criteria outlined in section 269C. The CEO, in turn, is obligated to assess the application against these criteria and, if satisfied, to issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, as stipulated in subsection 269K(1). This process ensures transparency and allows for stakeholder input before a TCO is finalised.
In terms of breaches and penalties, the Act does not explicitly detail penalties for failing to comply with the requirements of a TCO or for submitting an invalid application. However, general legal consequences may apply for any breaches of the Act's provisions. The Customs Act 1901 encompasses various sections that could lead to civil or criminal penalties if goods are imported or exported in violation of its terms, but these are not specifically addressed in the explanatory statement regarding TCO No. 0937101. The primary focus here is on the procedural correctness and the substantive criteria for issuing TCOs rather than on penal provisions.