EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937122
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 squeegees on 01 October 2009.
Instrument
TCO No 0937122 was made on 11 December 2009. It declares that those certain squeegees 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. 0937122 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 Australian Parliament, provides a framework for the regulation of imports and exports, including the imposition of customs duties. To address gaps in the existing tariff structure and to promote specific economic objectives, the Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA. These orders provide for a reduction or exemption from customs duty on certain imported goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The policy objective behind TCOs is to support industries by lowering the cost of imported goods, thereby making them more competitive with locally produced alternatives.
The Tariff Concession Instrument No. 0937122, published in 2010, exemplifies the application of these provisions. In this instance, McPhersons Consumer Products applied for a TCO for certain squeegees, which were granted after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. As a result, these squeegees were subject to a free rate of duty, as opposed to the general rate of 5%, effective from the date of the application, 1 October 2009. The process involved publishing a notice in the Gazette, inviting submissions from interested parties, none of which were received. This instrument illustrates how the Customs Act and its associated regulations facilitate the adjustment of customs duties to support specific economic and industrial policies.
Scope and Application
The Tariff Concession Instrument No. 0937122 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain squeegees, and to any person or entity seeking to import these goods into Australia. The instrument was made by the Chief Executive Officer of Customs, who has the authority to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on goods, provided certain criteria are met. Specifically, the TCO applies to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The instrument affects the importation of these goods by reducing their duty from the general rate of 5% to free, thereby benefiting importers. It applies nationally across Australia, encompassing both state and territory jurisdictions. Notably, the TCO does not affect the rights of any person adversely nor impose liabilities on anyone for actions taken before its registration. The application of this TCO is further defined and potentially expanded through subordinate instruments, which may include further specifications or amendments to the conditions and scope of the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0937122 under the Customs Act 1901 include section 269C (3) (section 269C specifies the criteria for a Tariff Concession Order (TCO) application, section 269B (section 269B provides definitions for key terms such as "goods produced in Australia", "ordinary course of business" and "substitutable goods" relevant to a TCO), and section 269P (3) (section 269P (3) requires the Chief Executive Officer (CEO) of Customs to make a written order declaring the goods subject to the TCO application). Section 269F allows for an application to be made by a person for a TCO in respect of goods. If the CEO determines that the application meets the core criteria and no substitutable goods are produced in Australia, they must issue a TCO.
The Act imposes several obligations on the parties involved. Section 269K (1) requires the CEO to publish a notice in the Gazette after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions. Additionally, the Act mandates that a TCO is to be taken as having come into force on the day the application for the TCO was lodged, as outlined in section 269S (1).
The Tariff Concession Instrument No. 0937122 declares that certain squeegees are subject to item 50 of Schedule 4 to the Tariff, with a rate of duty reduced to free from the general rate of 5%. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the day the TCO came into force, pursuant to paragraph 126 (1) (r) of the Regulations. The TCO does not impose any liabilities on any person.
There are no specified offences or penalties in the Tariff Concession Instrument No. 0937122. However, non-compliance with the Customs Act 1901 or the associated regulations could lead to various civil or criminal consequences. Penalties for breaches of the Customs Act can include fines and imprisonment, with the specific penalties varying depending on the nature and severity of the offence.