EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937106
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 rubber balls on 01 October 2009.
Instrument
TCO No 0937106 was made on 18 December 2009. It declares that those certain rubber balls 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. 0937106 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 Commonwealth Parliament, established a framework for the administration of customs and excise through various provisions, including the creation of Tariff Concession Orders (TCOs). These orders provide reduced rates of customs duty on specific goods, subject to certain criteria being met, as outlined in section 269F of the Act. The act allows for applications from individuals or entities seeking tariff concessions, provided the goods in question do not fall under the prohibitions specified in section 269SJ. The core criteria for granting such concessions are detailed in sections 269C, 269B, and 269D of the Act, focusing on the non-production of substitutable goods in Australia and the ordinary course of business. The explanatory statement details Tariff Concession Instrument No. 0937106, which was introduced to provide tariff concessions for certain rubber balls applied for by McPhersons Consumer Products, effective from 1 October 2009. The tariff concession reduces the duty on these goods from 5% to free, as no substitutable goods were produced in Australia. The instrument was gazetted on 18 December 2009, following a period of public consultation where no objections were received. The tariff concession order aims to facilitate trade by lowering the cost of importing the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0937106, made under the Customs Act 1901, applies to rubber balls imported by McPhersons Consumer Products, providing them with a concession on customs duty. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders, which apply to specific goods, reducing the rate of customs duty to zero if certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislation is applicable nationally within Australia, affecting the rights and obligations of importers and the Commonwealth. The scope of the Act extends to ensuring that no person (other than the Commonwealth) is disadvantaged or imposed with liabilities due to actions taken prior to the registration of the concession. Additionally, importers can apply for refunds of duty paid on these goods since the date the concession came into effect, further clarifying the application and impact of this legislation.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes the framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows a person to apply to the CEO for a TCO concerning particular goods, provided they do not fall under the categories specified in section 269SJ, which are ineligible for TCOs. If the CEO is convinced that the application pertains to goods not specified in section 269SJ, they must then determine whether the application meets the core criteria outlined in section 269C.
Section 269C states that a TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Definitions pertinent to these criteria are provided in sections 269D, 269E, and 269F, which clarify terms such as 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods.' If the CEO is satisfied that the application meets these criteria, they must issue a written order, the TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
Section 269P(3) of the Customs Act 1901 requires the CEO to make a TCO if satisfied that the application meets the core criteria. For instance, McPhersons Consumer Products applied for a TCO concerning certain rubber balls on 1 October 2009. The TCO No. 0937106 was issued on 18 December 2009, declaring that these rubber balls are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, as the CEO confirmed that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%.
Under section 269K(1) of the Act, the CEO is mandated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice includes an invitation for any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. In this instance, no submissions were received in response to the published notice. The TCO No. 0937106 came into effect on 1 October 2009, the day the application was lodged, as per subsection 269S(1) of the Act.
The TCO does not adversely affect the rights of any person (other than the Commonwealth) as of the date of registration, nor does it impose liabilities on any person (other than the Commonwealth) concerning actions taken or omitted before the registration date. Importers will benefit from this TCO as they can apply for a refund of duty on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations. Furthermore, the TCO does not impose any liabilities on any person.