EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943276
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.
Best and Less applied for a TCO in respect of certain plastic clothes hangers on 16 November 2009.
Instrument
TCO No 0943276 was made on 29 January 2010. It declares that those certain plastic clothes hangers 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. 0943276 is taken to have come into force on 16 November 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 provide a comprehensive framework for the regulation and administration of customs and excise in Australia. Among its provisions, Part XVA introduces the mechanism for Tariff Concession Orders (TCOs), which allow for the reduction of customs duty on certain goods. This legislative instrument was designed to address the need for tariff flexibility in response to specific market conditions and trade circumstances, particularly where no locally produced substitutes exist. The Tariff Concession Instrument No. 0943276 was introduced by the Chief Executive Officer of Customs under the authority granted by section 269F of the Act. The policy objective of this instrument, as reflected in the Explanatory Statement, is to facilitate trade by reducing the duty on specific goods, thereby making them more competitively priced in the Australian market. The process involves an application for a TCO, assessment against core criteria to ensure no Australian-made substitutes exist, and subsequent issuance of the order if criteria are met. This legislative action aims to support importers by lowering duty rates and enhancing the accessibility of certain goods.
Scope and Application
The Tariff Concession Instrument No. 0943276 applies to the concessions for customs duty on certain plastic clothes hangers under the Customs Act 1901, which is administered at the Commonwealth level. The Act applies to individuals or entities seeking tariff concessions for specific goods, ensuring that the application process adheres to the criteria set out in the Act. The concession applies to goods specified in the application, in this case, plastic clothes hangers, provided that no substitutable goods are produced in Australia. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the customs duties associated with these imports. The application is subject to the core criteria outlined in the Act, particularly section 269C, which requires that no substitutable goods are produced in Australia on the date the application was lodged. There are no stated exclusions or exemptions in this specific instrument, but the Act generally excludes goods specified in section 269SJ from being subject to a TCO. The application and effect of the TCO can be extended or restricted through subordinate instruments, as outlined in the Customs Regulations 1995. The commencement of the TCO is deemed to be on the date the application was lodged, with retrospective effect for duty refund purposes under the relevant regulations.
Key Provisions
The primary sections of this legislation, as stated in the explanatory statement, pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the application meets the core criteria outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The core criteria, defined in section 269C, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. This means that if no similar goods were being produced domestically, the CEO must consider the application favourably. The instrument in question, TCO No. 0943276, pertains to certain plastic clothes hangers and was declared on 29 January 2010, applying a zero rate of duty to these goods, as opposed to the general rate of 5%.
The obligations imposed by this Act on the parties it governs are primarily centred around the application process for TCOs. For the applicant, this involves ensuring that the application is made in accordance with the provisions of the Customs Act 1901, particularly meeting the core criteria set out in section 269C. For the CEO, the obligations include accepting valid applications, determining whether the core criteria are met, and making a written TCO if the criteria are satisfied. Furthermore, section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons for opposing the TCO. In this instance, no submissions were received.
Regarding the potential consequences of breach, the Customs Act 1901 does not explicitly detail offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, breaches of the Customs Act or the associated regulations could result in penalties. For example, section 152 of the Customs Act imposes a penalty of up to $22,200 or imprisonment for up to two years, or both, for offences such as making a false statement or supplying false information in connection with goods. Similarly, section 154 imposes a penalty of up to $11,100 or imprisonment for up to one year, or both, for lesser offences such as failing to comply with a notice or direction. These penalties are indicative and may vary depending on the specific circumstances of the breach.