EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939365
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 String Dispenser on 20 October 2009.
Instrument
TCO No 0939365 was made on 08 January 2010. It declares that those certain String Dispenser 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. 0939365 is taken to have come into force on 20 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 Parliament of Australia, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act addresses the gap in tariff regulation by providing a mechanism for reducing customs duty on specific goods under certain conditions. The introduction of Tariff Concession Instrument No. 0939365 in 2010 exemplifies this legislative intent, as it provides tariff concessions for certain String Dispensers, lowering the duty rate from 5% to free. This was achieved following an application by McPhersons Consumer Products and subsequent determination by the CEO that no substitutable goods were being produced in Australia. The policy objective underpinning this instrument is to facilitate trade by reducing the cost of importing specific goods, thereby benefiting importers and potentially encouraging trade in these products.
Scope and Application
The Tariff Concession Instrument No. 0939365 applies to goods for which McPhersons Consumer Products sought a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901. This instrument pertains specifically to certain String Dispensers and the rate of customs duty applied to them, as declared by the Chief Executive Officer of Customs (the CEO). The application of the TCO is geographically limited to Australia, as it concerns the importation of goods into the country. The TCO does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO, and it does not affect the rights of persons other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person. The instrument is in effect from the date the application was lodged, 20 October 2009, as per the commencement provision in the Act. The CEO's decision to grant the TCO was made after no submissions were received in response to a notice published in the Gazette, inviting interested parties to provide reasons why the TCO should not be made.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0939365 under the Customs Act 1901 (the Act) involve the application and creation of Tariff Concession Orders (TCOs) as outlined in sections 269F, 269C, 269B, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a TCO concerning specific goods. If the application is deemed not to pertain to goods listed in section 269SJ, which are ineligible for TCOs, the CEO evaluates whether the application meets the core criteria specified in section 269C. If the application meets these criteria, the CEO must issue a written TCO as per section 269P(3). This TCO declares that the goods in question are subject to a specified rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that no substitutable goods are produced in Australia on the day the TCO application is lodged, as defined by sections 269C, 269B, and 269D. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have concerns regarding the TCO application, as required by subsection 269K(1). Should the CEO receive no submissions, the TCO can proceed without opposition. Once the TCO is issued, it comes into force on the date the application was lodged, as stipulated by subsection 269S(1). This means that any goods imported after this date will benefit from the reduced duty rate specified in the TCO.
Failure to comply with the requirements of the Act or the TCO could lead to various consequences. Although the explanatory statement does not specify offences, penalties, or civil/criminal consequences for breach, non-compliance with customs regulations generally may result in fines or legal action under the Customs Act 1901 or other related legislation. For instance, the importation of goods without the requisite duty paid could result in penalties as outlined in the Customs Act. Given that the TCO aims to reduce the duty on certain goods, any circumvention of this concession could be subject to the standard penalties for non-compliance with customs duties.