EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942051
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 polystyrene tube squeezer on 28 October 2009.
Instrument
TCO No 0942051 was made on 15 January 2010. It declares that those certain polystyrene tube squeezer 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. 0942051 is taken to have come into force on 28 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 Australian Parliament, provides a legislative framework for customs and border control in Australia. Among its provisions, Part XVA introduces a scheme for Tariff Concession Orders (TCOs), which can be applied for by individuals or entities to reduce the customs duty on certain imported goods. The Tariff Concession Instrument No. 0942051, made in 2010, addresses the problem of ensuring that tariff concessions are granted appropriately when no substitutable goods are produced domestically. This particular instrument was developed in response to an application by McPhersons Consumer Products for a tariff concession on certain polystyrene tube squeezers, aiming to provide a policy objective of reducing the duty on these goods from the general rate of 5% to free. The instrument ensures that the rights of importers are positively affected and no liabilities are imposed on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0942051 under the Customs Act 1901 applies to specific goods, namely certain polystyrene tube squeezers, as determined by the Chief Executive Officer (CEO) of Customs. The instrument was made in response to an application by McPhersons Consumer Products on 28 October 2009, and it came into effect on the same day. The application process requires that the goods in question do not have substitutable equivalents produced in Australia, which was confirmed by the CEO, leading to the concession. The concession allows for these goods to be imported without incurring the general customs duty rate of 5%, instead applying a duty-free rate. The instrument does not extend to any goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. Furthermore, the instrument does not disadvantage any person other than the Commonwealth nor impose any liabilities on individuals or entities for actions taken prior to the instrument's registration. The instrument's scope and effect are confined to the terms and conditions specified within the Instrument and the Customs Act 1901, with no broader exemptions or exclusions identified beyond those stipulated by the Act.
Key Provisions
The key operative sections of the Tariff Concession Order No. 0942051 under the Customs Act 1901 (section 269C) establish the criteria for tariff concessions, where the Chief Executive Officer of Customs (CEO) must decide whether an application meets these criteria if it is not in respect of goods specified in section 269SJ of the Act. The order, 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 declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The specific goods in this case, certain polystyrene tube squeezers, are declared to be subject to item 50 of Schedule 4, with a reduced rate of duty from the general rate of 5% to free.
The Act imposes obligations on parties applying for tariff concessions. Firstly, an applicant must ensure their application is not in respect of goods specified in section 269SJ of the Act. Secondly, the applicant must demonstrate to the CEO that the goods do not have substitutable alternatives produced in Australia, as defined under sections 269D and 269E of the Act. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, although no such submissions were received in this case.
Failure to comply with the requirements of the Customs Act 1901 can lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions within the Act may provide for civil or criminal penalties for non-compliance. For instance, knowingly providing false or misleading information in an application could result in fines or imprisonment under section 269Y of the Act, which generally covers offences related to false statements or documents in the context of customs. The exact penalties would depend on the severity of the breach and could include fines up to a substantial amount and/or imprisonment for several years.