EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942060
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 toy sets on 28 October 2009.
Instrument
TCO No 0942060 was made on 08 January 2010. It declares that those certain toy sets 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. 0942060 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 was enacted to facilitate the regulation of imports and exports within Australia, providing a framework for the collection of customs duty and other charges. The 2010 Tariff Concession Instrument No. 0942060 was introduced to address a specific gap in the application process for tariff concessions, streamlining how certain goods could qualify for reduced customs duties. This instrument was enacted by the Australian Parliament and aimed to ensure that the tariff concession process was clear and efficient, allowing for the application of reduced duties where appropriate. The policy objective was to provide relief to businesses by lowering the duty on certain goods, thereby potentially reducing costs and increasing competitiveness without adversely affecting the rights of existing parties. The instrument specifies that certain toy sets qualify for a tariff concession, setting their duty rate to free, which contrasts with the general duty rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0942060 applies to the toy sets specified in the instrument, subject to the provisions of the Customs Act 1901. It is pertinent to any entity that imports or plans to import these specific toy sets into Australia, as it alters the rate of customs duty applicable to them. The Act applies on a Commonwealth level, administered by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) that lower the rate of customs duty for certain goods under the Customs Tariff Act 1995. The application of this particular TCO is effective from 28 October 2009, the date on which the application was lodged, as per the relevant subsection of the Customs Act. This legislation does not extend to goods specified in section 269SJ of the Customs Act, which outlines goods that cannot be subject to a TCO. The Act's reach is confined to the geographic limits of Australia, and any subordinate instruments or regulations may further specify or restrict its application.
Key Provisions
The Customs Act 1901, specifically Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). These orders can reduce the customs duty on certain goods. If a person applies for a TCO for goods, and the CEO determines that the application meets the criteria (section 269C), a TCO can be issued, provided the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. A TCO is made by the CEO in a written order that specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)). In this case, McPhersons Consumer Products applied for a TCO for certain toy sets, which was granted as item 50 of Schedule 4, with the general rate of duty being 5% and the rate for the TCO being free (TCO No 0942060).
The CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No 0942060, no submissions were received in response to this notice. A TCO is deemed to come into force on the day the application is lodged (subsection 269S(1)). Consequently, TCO No 0942060 is effective from 28 October 2009. Importantly, the TCO does not affect the rights of any 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) for actions taken before the registration date. Importers of the affected goods will benefit from this TCO, and under paragraph 126(1)(r) of the Regulations, they can apply for a refund of duty on goods imported since the TCO came into force. No liabilities are imposed on any person by the TCO.
Breach of the requirements set out in the Customs Act 1901 and related regulations can lead to various penalties and consequences. For instance, making a false statement in an application for a TCO can result in a civil penalty of up to 10,000 penalty units (section 283AJ). Additionally, failure to comply with the provisions regarding the import and export of goods can lead to criminal penalties, including fines of up to 220,000 penalty units and imprisonment for up to 10 years (section 283A). These penalties underscore the importance of adhering to the requirements and obligations set out in the Act and its associated regulations.