EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937109
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 lights on 01 October 2009.
Instrument
TCO No 0937109 was made on 18 December 2009. It declares that those certain lights 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. 0937109 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 by the Australian Parliament to provide a comprehensive framework for the regulation of customs and excise duties, among other things. The Act was introduced to address the need for a structured approach to managing imports and exports, ensuring compliance with customs regulations, and facilitating trade. Under this Act, the Chief Executive Officer of Customs has the authority to make Tariff Concession Orders (TCOs) which reduce the rate of customs duty on specified goods. The Tariff Concession Instrument No. 0937109, made on 18 December 2009, is one such TCO made in response to an application from McPhersons Consumer Products for certain lights. The CEO was satisfied that these goods qualified for tariff concessions as no substitutable goods were produced in Australia, thus reducing the duty from the general rate of 5% to free. This instrument was designed to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into effect on 1 October 2009, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCOs), which can be applied for by any person and are determined by the Chief Executive Officer of Customs. The Act applies to individuals and entities seeking a reduction in customs duty on specific goods by establishing whether these goods are substitutable by Australian-produced goods. The TCO scheme operates nationally across Australia, impacting importers who can benefit from reduced duty rates or refunds on previously imported goods. The Act excludes goods specified in section 269SJ, which are ineligible for tariff concessions. The scope of the Act can be further defined or adjusted through subordinate instruments, although specific details of these instruments are not provided in the explanatory statement. The commencement of TCO No. 0937109, effective from the date of the application, demonstrates the Act's intent to immediately benefit importers without retroactively affecting their rights or imposing new liabilities.
Key Provisions
The main operative sections of this legislation, specifically section 269F of the Customs Act 1901, allow for the application of Tariff Concession Orders (TCOs) by any person to the Chief Executive Officer of Customs (CEO). This provision permits a lower rate of customs duty for goods that are the subject of a TCO, provided the application meets certain criteria (section 269C). The CEO must determine whether the application is for goods that are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO finds that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess applications against the core criteria, which involve verifying that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who might oppose the TCO (subsection 269K(1)). This procedural step ensures transparency and allows for public input. Furthermore, once a TCO is issued, it does not affect the rights of any person as at the date of registration, ensuring that no person (other than the Commonwealth) is disadvantaged or imposed liabilities for actions taken prior to the TCO's registration (subsection 269S(1)).
The legislation also outlines specific consequences for non-compliance. While the explanatory statement does not detail specific offences, the general legal framework implies that failure to adhere to the provisions could result in civil or criminal penalties. The penalties may include fines and other sanctions as prescribed by the relevant legislation. The maximum penalties, however, are not specified in the explanatory statement but would be determined by the applicable laws governing administrative and customs compliance.
In summary, the Customs Act 1901, through its sections and subsidiary legislation, establishes a structured process for the application and issuance of Tariff Concession Orders, ensuring that customs duties are applied fairly and transparently. The obligations for the CEO and applicants are clear, and while specific penalties for non-compliance are not detailed in the explanatory statement, they are governed by the broader legal framework that includes potential fines and other administrative sanctions.