EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939735
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 beechwood kitchenware on 22 October 2009.
Instrument
TCO No 0939735 was made on 04 January 2010. It declares that those certain beechwood kitchenware 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. 0939735 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 Tariff Concession Instrument No. 0939735 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific imported goods. The instrument was introduced to provide relief on certain beechwood kitchenware by McPhersons Consumer Products, effective from the date of application, 22 October 2009. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for a Tariff Concession Order (TCO). This decision led to the declaration that the beechwood kitchenware are subject to a free rate of duty, down from the general rate of 5%. The instrument was published in the Gazette with an invitation for submissions, none of which were received, leading to the formalisation of the TCO on 4 January 2010. This measure ensures that importers of these goods can apply for a refund of duties paid since the effective date of the concession, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0939735, under the Customs Act 1901, applies to any individual or entity seeking a tariff concession order (TCO) for specific goods, ensuring they meet the criteria set out in the Act. The geographic reach of this legislation is national, as it is an instrument of the Commonwealth of Australia. The Act applies to goods that are subject to the TCO application, provided they are not specified in section 269SJ of the Act which lists those goods that cannot be subject to a TCO. The application must also meet the core criteria, such as the absence of substitutable goods produced in Australia at the time of application. The TCO in question, concerning certain beechwood kitchenware, was made effective from the date the application was lodged, 22 October 2009. The TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. It notably benefits importers by allowing them to apply for a refund of duty on goods imported since the commencement date of the TCO.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0939735 under the Customs Act 1901 involve the application and processing of Tariff Concession Orders (TCOs). Section 269F allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a TCO on certain goods. Section 269C specifies that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written order (the TCO) must be made.
The Act imposes certain obligations on both the applicant and the CEO. McPhersons Consumer Products, as the applicant, must ensure that their application for a TCO is lodged with all necessary details and evidence to satisfy the core criteria outlined in section 269C. The CEO, on receiving the application, has the obligation to assess whether it meets the core criteria, consult with relevant stakeholders by publishing a notice in the Gazette (subsection 269K(1)), and if satisfied, to issue the TCO as per section 269P(3). Additionally, under subsection 269S(1), the TCO is deemed to have come into force on the day the application was lodged.
The Act does not explicitly state any offences, penalties, or consequences for breaches related to the issuance or application of TCOs. However, general compliance with the Customs Act 1901 and related regulations is expected. For example, any fraudulent claims or misrepresentations in the application process could potentially lead to legal action under other provisions of the Act, which might involve civil or criminal penalties. The Act ensures that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person other than the Commonwealth.