EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937117
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 0937117 was made on 11 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. 0937117 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 Tariff Concession Instrument No. 0937117 was enacted under the Customs Act 1901, providing a pathway for tariff concessions that reduce or eliminate customs duty on certain imported goods. This legislative instrument was introduced to address the need for tariff relief on specific goods where there are no suitable Australian-made alternatives, thereby encouraging competition and potentially lowering consumer prices. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with the Act, following an application by McPhersons Consumer Products on 1 October 2009. The decision to grant the concession was based on the absence of substitutable goods produced in Australia, as mandated by the core criteria under the Act. This tariff concession is intended to benefit importers by potentially reducing their duty liabilities and does not impose any new obligations or liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Order No. 0937117 under the Customs Act 1901 applies to specific goods, namely certain lights, as identified in the application submitted by McPhersons Consumer Products on 1 October 2009. The Act pertains to the concession of customs duty rates for particular goods, provided they meet the stipulated core criteria, which include the absence of substitutable goods produced in Australia. The CEO of Customs, upon being satisfied that the application complies with these criteria, issues a Tariff Concession Order (TCO) that effectively reduces the duty on the specified goods to zero. This legislative instrument extends to the national jurisdiction of Australia, applying the Customs Act 1901 across the Commonwealth. The TCO does not disadvantage any person by affecting their rights as of the date of registration, nor does it impose any new liabilities, thereby protecting the interests of the Commonwealth and ensuring that importers can seek duty refunds for goods imported since the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0937117 under the Customs Act 1901 (section 269F) allow for the application of tariff concessions on certain goods, provided the application meets specific criteria. The Chief Executive Officer of Customs (CEO) is the authority responsible for deciding whether an application for a Tariff Concession Order (TCO) meets the core criteria. If the CEO determines that the application is valid and meets the criteria, a TCO will be issued (section 269P(3)). In this case, McPhersons Consumer Products applied for a TCO on certain lights on 1 October 2009, and the CEO issued TCO No. 0937117 on 11 December 2009, declaring that the lights are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations and requirements on both the CEO and applicants for TCOs. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. If the CEO is satisfied that the application is valid and meets the core criteria, they are required to make a written order declaring the goods subject to a prescribed tariff item (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In the case of McPhersons Consumer Products, the CEO did not receive any submissions in response to the notice published.
The Act includes provisions for offences, penalties, and consequences for breaches. While the explanatory statement does not detail specific penalties, it is understood that non-compliance with the provisions of the Customs Act 1901 can result in both civil and criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach. For McPhersons Consumer Products, adhering to the TCO requirements ensures compliance with the Act, avoiding any potential penalties associated with non-compliance.
The TCO does not affect the rights of any person, except the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the TCO's effective date. Importers, however, stand to benefit from the TCO as they may apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person.