EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942056
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.
Mcpherson's Consumer Products applied for a TCO in respect of certain dusters on 28 October 2009.
Instrument
TCO No 0942056 was made on 15 January 2010. It declares that those certain dusters 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. 0942056 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, established a framework for the application and administration of customs duties, including the mechanism for Tariff Concession Orders (TCOs) under Part XVA. This part of the Act was introduced to address the need for a flexible system that could provide tariff relief for specific goods, thereby supporting economic growth and competitiveness by reducing the cost of imported goods for certain industries. The Tariff Concession Instrument No. 0942056, made on 15 January 2010, is an example of this mechanism in action, where McPherson's Consumer Products successfully applied for a TCO for certain dusters, resulting in a reduction of duty from 5% to free. The process involves application by interested parties, assessment by the Chief Executive Officer of Customs, and publication in the Gazette for public comment, with the ultimate goal of ensuring that tariff relief is granted fairly and transparently, benefiting importers without disadvantaging other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0942056, made under the Customs Act 1901, applies to the importation of specific dusters for which McPherson's Consumer Products sought a Tariff Concession Order (TCO). The Act applies to any person or entity that imports the specified goods, allowing them to benefit from a lower rate of customs duty as set out in the TCO. The instrument has a national reach, as it is an instrument under the Commonwealth's customs legislation. The TCO applies only to the specified goods, which are granted a concession under the Customs Tariff Act 1995, and does not affect any other goods or entities. The scope of the Act is limited to the specific goods for which the TCO was granted, and the concessions provided by the TCO do not extend to any other goods or circumstances unless otherwise specified in subordinate instruments. The Act does not contain any exclusions or exemptions apart from those specified in section 269SJ of the Customs Act 1901, which details goods that cannot be subject to a TCO. The application of the TCO is contingent upon the conditions outlined in sections 269C and 269P of the Act, and the CEO's satisfaction that the goods meet the core criteria for concession.
Key Provisions
The main operative sections of this legislation (section 269F, 269C, 269B, 269P(3) and 269S) provide a framework for the application and consideration of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act. Section 269C outlines the core criteria that must be met for an application to be considered, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B and 269E define key terms such as ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties it governs are primarily centred on the application process and the assessment of TCOs. The CEO is required to consider applications for TCOs and determine whether they meet the core criteria set out in section 269C. If the CEO decides that the application is valid, they must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)) and then make a written order declaring that the goods in question are subject to a TCO (section 269P(3)). The Act also requires that TCOs come into force on the day the application for the TCO was lodged (subsection 269S(1)), which means that the benefits of the concession are retroactive to the date of the application.
Failure to comply with the requirements of this Act may result in penalties and consequences. However, the Explanatory Statement does not detail specific offences, penalties or consequences for breach. The Act does state that TCOs do 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 (subsection 269S(2)). Importers of goods that are subject to a TCO may be eligible for a refund of duty on goods imported since the day on which the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).