EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937119
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 pet grooming brushes on 01 October 2009.
Instrument
TCO No 0937119 was made on 11 December 2009. It declares that those certain pet grooming brushes 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. 0937119 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. 0937119 was enacted under the Customs Act 1901 to address the issue of tariff concessions for specific imported goods. This instrument, published on 11 December 2009, grants tariff concessions for certain pet grooming brushes, effectively reducing the customs duty rate from the general rate of 5% to free. This concession was introduced to support the application by McPhersons Consumer Products, which sought to lower the duty on these specific goods, provided that no substitutable goods were produced in Australia at the time of application. The instrument was made after the Chief Executive Officer of Customs determined that the application met the core criteria under the Act. The process involved publishing a notice in the Gazette to invite any objections to the concession, though none were received. The tariff concession came into effect on 1 October 2009, the date the application was lodged, and it ensures that the rights of importers are positively affected without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0937119 under the Customs Act 1901 applies to certain pet grooming brushes, specifically those for which McPhersons Consumer Products submitted an application on 1 October 2009. The Act permits the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which grant a lower rate of customs duty to the specified goods, provided the core criteria are met. The instrument was made on 11 December 2009, and it declared that the specified pet grooming brushes are subject to a duty rate of free, down from the general rate of 5%, upon the satisfaction that no substitutable goods were produced in Australia. This instrument applies nationally and affects the rights of importers beneficially, allowing them to apply for refunds of duties on goods imported since the effective date of the TCO, 1 October 2009, without imposing any new liabilities. The TCO does not impact the rights of any person other than the Commonwealth regarding actions taken before its registration.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0937119, under the Customs Act 1901, are outlined in section 269F, which allows for applications to the Chief Executive Officer of Customs (CEO) for Tariff Concession Orders (TCOs). If the CEO determines that the application does not pertain to goods specified in section 269SJ, they must assess whether it meets the core criteria as defined in section 269C. For an application to meet these criteria, it must be established that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The meanings of terms such as ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’ are further clarified in sections 269D, 269E, and 269F respectively. Once the CEO is satisfied that the core criteria are met, they are required under section 269P(3) to issue a written order, or TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this legislation primarily rest on the CEO of Customs. Upon receiving an application under section 269F, the CEO must determine whether the application is valid and if it pertains to goods that cannot be subject to a TCO, as outlined in section 269SJ. If the application is deemed valid, the CEO must then assess whether it meets the core criteria set out in section 269C. This involves confirming that no substitutable goods were produced in Australia on the date the application was lodged. Should the application meet the core criteria, the CEO must issue a TCO as per section 269P(3), specifying the tariff treatment of the goods. Additionally, the CEO is required to publish a notice in the Gazette under section 269K(1), inviting submissions from any interested parties before making a final decision on the TCO.
The legislation does not explicitly detail offences or penalties for non-compliance with the TCO process itself; however, breaches of related customs duties or tariff regulations may incur penalties under other sections of the Customs Act 1901. For instance, providing false or misleading information in an application could lead to penalties under sections related to fraud or misrepresentation. The specific penalties for such breaches would depend on the severity and intent behind the breach, with potential outcomes including fines or imprisonment. The Customs Act also allows for civil actions to be taken for non-compliance, which could result in financial penalties or orders for restitution. The precise nature and extent of these penalties are governed by other sections of the Act and the Customs Regulations 1994.