EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939734
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 cooking kits on 22 October 2009.
Instrument
TCO No 0939734 was made on 04 January 2010. It declares that those certain cooking kits 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. 0939734 is taken to have come into force on 22 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 for the regulation of customs and excise duties. One of the mechanisms within this Act is the Tariff Concession Order (TCO), which allows for the reduction of customs duty rates on specific goods under certain conditions. This legislative instrument was introduced to address the need for tariff relief in cases where no substitutable goods are produced in Australia, thereby encouraging the importation of goods that are not domestically manufactured. The Explanatory Statement for Tariff Concession Instrument No. 0939734 details the process by which McPhersons Consumer Products successfully applied for a TCO for certain cooking kits, resulting in a reduction of the duty rate from 5% to free. This measure aims to benefit importers by potentially allowing them to claim refunds on duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0939734 applies to the goods specified in the Instrument, namely certain cooking kits, and operates under the framework established by the Customs Act 1901. This Act allows the Chief Executive Officer of Customs to grant tariff concessions on goods provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Instrument specifically declares that the certain cooking kits are subject to a free rate of duty, as opposed to the general rate of 5%, and this concession is applicable from the date the application was lodged, which was 22 October 2009. The Instrument is designed to benefit importers of these goods by potentially allowing them to claim refunds on duties paid prior to the Instrument’s effective date. Importantly, the Instrument does not affect the rights of any person, except the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the Instrument’s registration. The scope of the Instrument is confined to the particular goods it addresses and does not extend to other goods or industries unless specifically included in a subsequent Instrument.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. When an applicant, such as McPhersons Consumer Products, lodges an application for a TCO (section 269F), the CEO must assess if the application meets the core criteria (section 269C). A key criterion is whether substitutable goods are being produced in Australia in the ordinary course of business (sections 269D and 269E). If the CEO determines that no such substitutable goods exist, they must then issue a TCO, as occurred with TCO No. 0939734, which applies a zero rate of customs duty on specified cooking kits, down from the general rate of 5% (section 269P(3)).
The obligations imposed by the Act on the CEO and applicants revolve around the thorough assessment of TCO applications. The CEO must ensure that the application is not for goods specified in section 269SJ, which excludes certain goods from TCO eligibility. Upon satisfying that the application meets the core criteria, the CEO must publish a notice in the Gazette inviting any interested party to lodge a submission opposing the TCO (subsection 269K(1)). In the case of TCO No. 0939734, no such submissions were received. Furthermore, the TCO must come into force on the day the application was lodged (subsection 269S(1)), which was 22 October 2009 for this particular TCO.
There are no explicit offences, penalties, or consequences mentioned within the provided text regarding the breach of the provisions related to TCOs. However, the Act generally imposes a framework that, if not followed, could potentially lead to legal ramifications. For instance, any improper issuance of a TCO might result in disputes or challenges in court, though specific penalties are not outlined in the text. The Act ensures that the rights of persons, except for the Commonwealth, are preserved and not adversely affected by the issuance of a TCO, thus avoiding any retroactive liabilities for those involved.