EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942062
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 photo frames on 28 October 2009.
Instrument
TCO No 0942062 was made on 15 January 2010. It declares that those certain photo frames 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. 0942062 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 Tariff Concession Instrument No. 0942062, enacted under the Customs Act 1901, aims to address the need for a streamlined process to grant tariff concessions for specific goods, thereby facilitating trade by reducing the customs duty on certain items. This instrument was introduced to ensure that the Chief Executive Officer of Customs (CEO) can effectively manage applications for Tariff Concession Orders (TCOs) and apply reduced duty rates where appropriate. The CEO, operating under section 269F of the Act, must consider applications for TCOs and determine if they meet the core criteria, primarily by assessing whether there are no substitutable goods produced in Australia at the time the application is lodged. This legislation seeks to support Australian businesses by lowering the cost of importing specific goods, thereby promoting competitive trade practices.
The Tariff Concession Instrument No. 0942062, published in the Gazette and effective from 28 October 2009, was made following an application by McPhersons Consumer Products for a TCO concerning certain photo frames. The CEO, satisfied that no substitutable goods were produced in Australia, declared these photo frames to be subject to a 5% duty rate, down from the general rate. This decision was based on the premise that such a reduction would not disadvantage any party and would benefit importers by potentially allowing them to claim refunds on duties paid prior to the TCO’s effective date.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative provision allows for a reduced rate of customs duty on goods that fall under a TCO. The Act applies to any individual or entity that seeks to import goods and benefits from the tariff concessions, provided the goods do not fall under the exclusions specified in section 269SJ of the Act. This includes entities such as McPhersons Consumer Products, which applied for a TCO for certain photo frames in 2009. The geographic reach of this legislation is national, as it pertains to all imports into Australia and the associated customs duties.
Section 269C of the Act stipulates that for a TCO application to meet the core criteria, it must be the case that no substitutable goods were being produced in Australia at the time the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that these criteria are met, a written order, or TCO, must be issued. This specific TCO, No. 0942062, was published in the Gazette and became effective on 28 October 2009, the date the application was lodged, without any submissions against it. The TCO does not affect the rights of any person as at the date of registration or impose any liabilities on anyone, but it does confer benefits to importers by allowing them to apply for a refund of duty on the goods imported since the TCO came into force.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0942062 pertain to the application and issuance of a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901 (section 269F). The instrument declares that certain photo frames are subject to a concession, meaning that a lower rate of customs duty, specifically free of duty, applies to these goods (section 269P(3)). This is contingent upon the Chief Executive Officer of Customs (CEO) being satisfied that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). The CEO must also ensure that the goods do not fall under the restricted list specified in section 269SJ of the Act. If the CEO approves the application, a TCO is issued declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations imposed on the parties or entities governed by this Act primarily concern the application process and the conditions that must be met for a TCO to be granted. The applicant, in this case McPhersons Consumer Products, must submit a valid application to the CEO, who will then assess whether the application meets the core criteria (section 269C). The CEO must also ensure that a notice inviting objections to the TCO is published in the Gazette as soon as practicable after accepting the application as valid (subsection 269K(1)). Additionally, the CEO must determine whether the goods specified in the application are substitutable and whether they were produced in Australia in the ordinary course of business on the day the application was lodged.
Should there be a breach of the Act's provisions, various civil and criminal consequences may apply, although the specific text does not detail penalties. Generally, breaches of the Customs Act 1901 can result in significant penalties. For instance, under section 225 of the Customs Act, a person who wilfully makes a false statement or representation in an entry or document for the purposes of evading duty or penalties can face a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Similarly, any misuse of a TCO could potentially incur penalties under the relevant sections of the Act or associated regulations, although the specific penalties would depend on the nature and extent of the breach.