EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942073
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 cardboard badges on 28 October 2009.
Instrument
TCO No 0942073 was made on 15 January 2010. It declares that those certain cardboard badges 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. 0942073 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, establishes a framework for the imposition of customs duties on imported goods. It includes provisions for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on specific goods under certain conditions. The Tariff Concession Instrument No. 0942073, issued in 2010, is an example of such an order. This particular instrument was introduced to address the need for tariff concessions on certain goods, in this case, cardboard badges, by McPhersons Consumer Products. The policy objective of this concession is to ensure that no substitutable goods are produced in Australia, thereby potentially reducing the financial burden on importers and encouraging the importation of these goods. The instrument came into effect on the date the application was lodged, 28 October 2009, and does not impose any liabilities or disadvantage any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0942073, made under section 269F of the Customs Act 1901, applies to goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. The legislation pertains to any person or entity that applies for a TCO for goods that do not have substitutable Australian-produced counterparts and fall outside the exclusions listed in section 269SJ of the Act. The instrument specifically relates to certain cardboard badges that McPhersons Consumer Products applied for on 28 October 2009, which are now subject to a lower rate of customs duty as of the same date. The instrument's jurisdictional reach is national, as it operates under the Commonwealth's customs laws. The CEO must ensure that the application meets the core criteria, particularly that no substitutable goods are produced in Australia, before making the TCO. The rights of importers are positively affected by the TCO, allowing them to apply for a refund of duty paid on the goods since the TCO's effective date, while ensuring no liabilities are imposed on any person.
Key Provisions
The main operative sections of the Customs Act 1901, particularly Part XVA, facilitate the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows individuals or entities to apply for a TCO for specific goods, provided the goods are not listed in section 269SJ, which excludes certain types of goods from concession eligibility. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a TCO. This order declares that the goods specified in the application are subject to a lower customs duty rate as outlined in Schedule 4 of the Customs Tariff Act 1995. For instance, the TCO No. 0942073, issued on 15 January 2010, declared that certain cardboard badges are subject to a zero duty rate, down from the general 5% rate.
The Act imposes specific obligations on both the CEO and applicants. The CEO must ensure that any application for a TCO is assessed against the criteria in section 269C, particularly verifying that no substitutable goods are being produced in Australia at the time of application. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as stipulated in section 269K. McPhersons Consumer Products, the applicant in this case, must ensure their application complies with the requirements and provides all necessary information to support their case for tariff concession. The CEO's decision to issue or decline a TCO must be based on a thorough evaluation of the application and any submissions received.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can result in various consequences. If the CEO issues a TCO without meeting the criteria set out in section 269C, this could lead to legal challenges and potential penalties. Similarly, if an applicant submits false information to obtain a TCO, this constitutes an offence under the Act and could result in criminal charges, fines, or other civil penalties. The specific penalties for such breaches are not detailed in the provided text, but generally, penalties for non-compliance with Australian customs legislation can be severe, including substantial fines and potential imprisonment for serious offences.