EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944768
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 castor cups on 25 November 2009.
Instrument
TCO No 0944768 was made on 26 February 2010. It declares that those certain castor cups 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. 0944768 is taken to have come into force on 25 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 Tariff Concession Instrument No. 0944768 was enacted in 2010 as a means to address the need for tariff concessions on specific goods within Australia, in accordance with the Customs Act 1901. This instrument was developed to facilitate the application process for Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on certain goods. The Customs Act 1901 provides a framework under which the Chief Executive Officer of Customs can make TCOs, ensuring that the applications meet core criteria such as the absence of substitutable goods produced in Australia. The policy objective of this legislation is to support economic efficiency and competitiveness by providing tariff concessions where appropriate, thus benefiting importers and the broader market.
The instrument was introduced by the Parliament of Australia, and it operates under the Customs Act 1901, specifically targeting the gap in tariff rates for goods that do not have Australian-made substitutes. The Explanatory Statement for Instrument No. 0944768 clarifies that the instrument was made in response to an application by McPhersons Consumer Products for tariff concessions on certain castor cups, resulting in a reduction of duty from 5% to free. This measure was designed to come into effect from the date the application was lodged, ensuring that the rights of importers are protected and any duties paid prior to the concession can be refunded.
Scope and Application
The Tariff Concession Instrument No. 0944768, made under Part XVA of the Customs Act 1901, applies to the specific goods that are the subject of the application, in this case certain castor cups, which are declared to have a zero rate of customs duty rather than the general rate of 5%. The Act applies to individuals or entities that seek tariff concessions for goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods are produced in Australia. The geographic reach of this legislation is national, as it pertains to the Customs Act 1901 which is a Commonwealth Act. The application for a Tariff Concession Order (TCO) can be made by any person, but the decision to grant the concession rests with the Chief Executive Officer of Customs, who must be satisfied that the application meets the core criteria set out in the Act. There are specific exclusions, such as goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The Act allows for the extension or restriction of application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods subject to a TCO. The rights of importers are beneficially affected by this legislation, allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force.
Key Provisions
The Tariff Concession Instrument No. 0944768, made under the Customs Act 1901, primarily focuses on providing tariff concessions for specific goods. Pursuant to sections 269C and 269P(3) of the Act, the Chief Executive Officer of Customs (CEO) must assess whether an application for a Tariff Concession Order (TCO) meets the core criteria, which includes the condition that no substitutable goods are produced in Australia. If satisfied, the CEO must issue a TCO, as evidenced by TCO No. 0944768, which applies to certain castor cups and declares that they are subject to a free rate of duty instead of the general 5% rate. This process ensures that the goods in question benefit from a reduced customs duty rate.
The obligations imposed by the Customs Act 1901 on the parties involved are significant. The CEO must rigorously evaluate applications to ensure they meet the core criteria outlined in section 269C. McPhersons Consumer Products, as the applicant, must provide sufficient evidence that no substitutable goods are produced in Australia. Once the TCO is issued, the CEO has the obligation to publish a notice in the Gazette, inviting any interested party to submit objections, although no submissions were received for TCO No. 0944768. Importers of the affected goods must then apply for duty refunds under the Customs Act Regulations, ensuring that the concessions are properly and legally applied.
The Act also outlines the potential consequences for non-compliance. While the explanatory statement does not specify detailed offences or penalties under the Customs Act, it is understood that breaches of the provisions regarding tariff concessions could lead to enforcement actions. Generally, the Act provides for civil and criminal penalties for non-compliance with customs regulations, including fines and imprisonment. For instance, misleading or incorrect information in an application could result in significant penalties, as the Act aims to maintain the integrity of the customs duty system.