EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937107
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 novelty glasses on 01 October 2009.
Instrument
TCO No 0937107 was made on 30 December 2009. It declares that those certain novelty glasses 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. 0937107 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 was enacted to provide a framework for the administration of customs duties and other import and export charges, as well as to regulate the movement of goods in and out of Australia. The Act was introduced to address the need for a comprehensive and systematic approach to managing customs duties and related processes to facilitate international trade while protecting Australian industries and consumers. The Tariff Concession Instrument No. 0937107, made under the authority of the Customs Act 1901, provides an avenue for the Chief Executive Officer of Customs to grant tariff concessions on certain goods, thereby reducing the customs duty payable on those goods. This instrument was created to support Australian businesses by making specific goods more affordable, thus encouraging their use and production within Australia. The policy objective, as outlined in the Act, is to ensure that tariff concessions are granted only when there are no substitutable goods produced in Australia, thereby promoting local production and supporting the economic interests of the country.
Scope and Application
The Tariff Concession Instrument No. 0937107 under the Customs Act 1901 applies to any entity or individual seeking tariff concessions on goods imported into Australia, specifically targeting the reduction of customs duty rates for those goods. The scope of this Act extends to any entity that lodges an application for a Tariff Concession Order (TCO) with the Chief Executive Officer of Customs, provided the application pertains to goods that are not excluded under section 269SJ of the Act and meets the core criteria specified in section 269C. The application must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The TCO applies nationally and is effective from the date the application was lodged, as stipulated by subsection 269S(1) of the Act. The instrument does not disadvantage any person, other than the Commonwealth, by affecting their rights as they stood on the date of registration, nor does it impose any liabilities on individuals or entities for actions taken prior to the registration of the TCO. Any subsequent amendments or extensions of the application of this Act can be made through subordinate instruments as authorised by the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0937107, under the Customs Act 1901, pertain to the process of applying for and granting tariff concessions on certain goods. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for specific goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ, they must assess if it meets the core criteria outlined in section 269C. A TCO application meets these core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This particular TCO No. 0937107 applies to certain novelty glasses, reducing the duty rate from the general 5% to free.
The Act imposes several obligations and requirements on both the applicant and the CEO. The applicant must ensure that their application is not in respect of goods specified in section 269SJ and must provide all necessary information for the CEO to assess whether the core criteria are met. Once an application is received, the CEO must promptly publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be granted (subsection 269K(1)). The CEO is also required to make a written order if the application meets the core criteria and must ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO's registration date.
Breaches of the provisions within the Customs Act 1901 can lead to various offences and penalties. Although the explanatory statement does not detail specific offences or penalties related to TCOs, breaches of the Customs Act generally may result in both civil and criminal consequences. Civil penalties can include fines and compensation for any losses incurred, while criminal penalties may involve imprisonment. The exact penalties depend on the nature and severity of the breach. The Act does not specify maximum penalties in the explanatory statement, but penalties for breaches of the Customs Act can vary significantly and are determined by the courts based on the circumstances of each case.