EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939737
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 safety door guards on 22 October 2009.
Instrument
TCO No 0939737 was made on 04 January 2010. It declares that those certain safety door guards 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 10%. 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. 0939737 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. 0939737, enacted in 2010 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods. The Australian Parliament established this framework to allow for the reduction or elimination of customs duties on goods that are not produced domestically or are not readily available as substitutes. The policy objective is to encourage the importation of certain goods by making them more competitively priced, thereby benefiting consumers and businesses. McPhersons Consumer Products applied for and received a tariff concession on certain safety door guards, resulting in a reduction of the duty from 10% to free. The process involved the Chief Executive Officer of Customs assessing the application and confirming that no substitutable goods were produced in Australia, as required by the Act. The concession came into effect on the date of application, 22 October 2009, and importers can apply for refunds on duties paid before this date.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Orders (TCO), applies to individuals and entities seeking reduced customs duty rates on specific imported goods, provided the goods are not specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The Act operates at the Commonwealth level, meaning its provisions and the authority to grant TCOs fall under federal jurisdiction. Section 269C of the Act mandates that an application for a TCO will meet the core criteria if no substitutable goods are produced in Australia on the day the application is lodged. Notably, the Act does not impose any retroactive liabilities on persons other than the Commonwealth, and the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the TCO's effective date. Any subordinate instruments or regulations under the Customs Act can further extend or clarify the application of the TCO provisions.
Key Provisions
The Tariff Concession Instrument No. 0939737, issued under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) for specific goods. Section 269F of the Act allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning particular goods. If the CEO determines that the application does not relate to goods specified in section 269SJ of the Act, which are ineligible for a TCO, the CEO must assess whether the application fulfils the core criteria outlined in section 269C. This involves verifying that, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. Once the CEO confirms that the application meets these criteria, they must issue a written TCO, as stipulated in subsection 269P(3) of the Act.
The obligations imposed by the Act on the parties involved are primarily centred on the application process and the CEO’s assessment. The applicant must ensure their application is valid and pertains to goods not excluded by section 269SJ. The CEO’s responsibilities include reviewing the application, determining if the core criteria are met, and making a written TCO if the application is approved. Additionally, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO. This ensures transparency and allows for public input before a TCO is made.
Failure to comply with the provisions of the Customs Act 1901 can lead to various legal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of customs regulations generally can result in significant penalties. For example, knowingly or recklessly providing false information in an application for a TCO can lead to criminal charges. The maximum penalties for such offences can include fines of up to $22,200 for individuals and $111,000 for corporations, as per the Criminal Code Act 1995. Additionally, civil consequences may include the imposition of duties and interest on the goods, and potential legal actions for misrepresentation or fraud.