EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937104
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 spray bottles on 01 October 2009.
Instrument
TCO No 0937104 was made on 30 December 2009. It declares that those certain spray bottles 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. 0937104 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, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act aims to address the issue of applying reduced customs duty rates to specific goods, thereby providing a mechanism for tariff concessions. This legislative measure was introduced to support Australian industries by facilitating the import of certain goods at a lower customs duty rate, provided that no substitutable goods are produced in Australia. The policy objective is to enhance competitiveness and accessibility of particular goods within the domestic market without imposing additional burdens or liabilities on individuals or entities prior to the enactment of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0937104, made under Part XVA of the Customs Act 1901, applies to goods for which a Tariff Concession Order (TCO) has been granted by the Chief Executive Officer of Customs (CEO). The Act allows for the reduction or exemption of customs duty on certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. This legislation is designed to benefit importers by potentially lowering their duty liabilities on specified goods, as seen in the case of McPhersons Consumer Products, which successfully applied for a TCO on certain spray bottles. The geographic scope of this Act is national, as it is a Commonwealth Act, thereby applying across Australia. The instrument also ensures that it does not disadvantage or impose liabilities on individuals or entities for actions taken prior to its commencement, thereby safeguarding existing rights. Any exclusions or exemptions are limited to the specific conditions outlined in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The application and scope of this Act can be extended or restricted through subordinate instruments, such as regulations, which may provide additional definitions or procedural details.
Key Provisions
The Customs Act 1901, particularly as it pertains to Tariff Concession Orders (TCOs) under section 269F (1), allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods. If the CEO is satisfied that the application is not for goods specified in section 269SJ, which outlines goods that cannot be subject to a TCO, the application will then be evaluated against the core criteria specified in section 269C. For an application to meet these criteria, it must be demonstrated that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
The obligations imposed by the Act on the parties involved primarily revolve around the submission and assessment of TCO applications. The CEO is required to make a decision on applications that meet the core criteria, as outlined in section 269C, and to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. This is in accordance with subsection 269K(1) of the Act. Additionally, the Act requires the CEO to ensure that TCOs do not affect the rights of any person (other than the Commonwealth) as at the date of registration in a way that disadvantages them or imposes liabilities in respect of actions taken before the registration date.
Should any party fail to comply with the requirements or obligations set out in the Act, there may be legal consequences. However, the explanatory statement provided does not specify any particular offences, penalties, or civil or criminal consequences for breach of the Act. The TCO itself, such as TCO No. 0937104, which was made on 30 December 2009, provides tariff concessions on certain spray bottles, reducing the duty from 5% to free. This TCO came into force on 1 October 2009, the date the application was lodged, and does not impose any liabilities on any person. It does, however, allow importers of the affected goods to apply for a refund of duty on goods imported since the effective date of the TCO.