EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939740
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 towel holders on 22 October 2009.
Instrument
TCO No 0939740 was made on 04 January 2010. It declares that those certain towel holders 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. 0939740 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. 0939740 was enacted in 2010 under the Customs Act 1901, addressing a specific gap by facilitating tariff concessions for certain imported goods. The Customs Act 1901, specifically its Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which lower the customs duty on specified goods. This legislative instrument was introduced to provide relief from customs duties for certain imported goods, thereby benefiting importers and potentially stimulating trade by making imported goods more competitively priced. The instrument was issued after McPhersons Consumer Products applied for a TCO for certain towel holders, and after the CEO was satisfied that no substitutable goods were produced in Australia, aligning with the statutory criteria outlined in the Act.
Scope and Application
The Tariff Concession Instrument No. 0939740 applies to certain towel holders as specified in the application made by McPhersons Consumer Products, and is implemented under the Customs Act 1901. The Act, which is a Commonwealth legislation, allows the Chief Executive Officer of Customs to grant tariff concessions on goods through the issuance of Tariff Concession Orders (TCOs). The scope of the Act encompasses any person or entity that seeks to import goods and avail of reduced customs duty rates, provided that the goods in question do not fall under the list of excluded items as specified in section 269SJ of the Act. This particular TCO was made applicable from 22 October 2009, the date on which the application was lodged. It is pertinent to note that this TCO does not retroactively affect the rights of any person, ensuring that there are no disadvantages or liabilities imposed on any party in relation to actions taken prior to the TCO's registration. The TCO is limited to the goods specified in the application and does not extend to any other goods unless explicitly stated in a subsequent TCO. Furthermore, the instrument does not impose any new liabilities on individuals or entities beyond what is stipulated in the Customs Act and related regulations.
Key Provisions
The key operative sections of this legislation include sections 269C, 269F, and 269P of the Customs Act 1901, which lay out the criteria for applying for, assessing, and making a Tariff Concession Order (TCO) (sections 269C, 269F, and 269P). Section 269F allows an application for a TCO to be made by a person to the Chief Executive Officer of Customs (CEO), while section 269C stipulates that the CEO must consider whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the core criteria are met, section 269P(3) mandates that the CEO must issue a written TCO.
The obligations imposed by the Act on the parties and entities it governs include the requirement for the CEO to assess the validity of TCO applications against the core criteria outlined in section 269C (section 269F). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received in response to the notice.
Failure to comply with the requirements of the Act may result in various civil or criminal consequences. For instance, if an entity or individual knowingly or recklessly provides false or misleading information in an application for a TCO, they may be subject to penalties under section 283AB of the Customs Act 1901. The maximum penalty for an individual is 200 penalty units or imprisonment for one year, or both, whereas the maximum penalty for a body corporate is 10,000 penalty units or imprisonment for five years, or both. The imposition of these penalties would depend on the specific circumstances of any alleged breach and the discretion of the court in imposing a sentence.