EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944772
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 protective pads on 24 November 2009.
Instrument
TCO No 0944772 was made on 5 February 2010. It declares that those protective pads 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. 0944772 is taken to have come into force on 24 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. 0944772, enacted in 2010 under the Customs Act 1901, was introduced to provide a tariff concession for certain goods that were not produced in Australia. This legislative instrument enables the Chief Executive Officer of Customs to grant tariff concessions, lowering the customs duty rate for specified goods that meet the core criteria. In this instance, the instrument addresses a gap by offering a zero-duty rate for protective pads that are not produced in Australia, benefiting importers by potentially allowing them to claim refunds on duties paid before the concession took effect. The instrument was made without any submissions against it, indicating no opposition to the tariff concession. The policy objective is to support Australian importers by reducing the cost of importing specific goods that are not domestically produced, thereby promoting competition and consumer access to a broader range of products.
Scope and Application
The Tariff Concession Instrument No. 0944772 under the Customs Act 1901 applies to goods specified in the instrument, in this case protective pads, and governs the application of customs duty on these goods. It is applicable to entities and individuals who import these goods into Australia. The geographic and jurisdictional reach of this Act extends across the Commonwealth of Australia. The application of this legislation is limited to goods that meet the core criteria set out in section 269C of the Customs Act 1901, which stipulates that no substitutable goods should be produced in Australia on the day the application was lodged. Any exclusions from this Act are outlined in section 269SJ of the Act, which lists the goods that cannot be subject to a Tariff Concession Order. The application of this Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed items and rates of duty.
Key Provisions
The primary sections of this legislation are sections 269C, 269F, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C specifies the core criteria that must be met for the application to be considered valid. If the CEO determines that the application meets these criteria, section 269P mandates the CEO to issue a written TCO. Finally, section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any person who may oppose the TCO.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO is valid and meets the criteria outlined in section 269C. If the application is deemed valid, the CEO is required to issue a written TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette under section 269K, inviting any interested party to submit their views on the proposed TCO. McPhersons Consumer Products, the applicant in this case, must also provide all necessary information and evidence to support their application. The CEO, in turn, must review the application and any submissions received, and make a decision based on the information provided.
Failure to comply with the requirements of the Act may result in civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, it is reasonable to infer that any non-compliance with the Act's provisions could result in legal action. This may include fines or other penalties as prescribed by the relevant laws. Additionally, any person adversely affected by the issuance of a TCO may have grounds to challenge the decision in court.
In summary, the legislation under discussion outlines a scheme for the issuance of Tariff Concession Orders, which provide for reduced customs duty rates on certain goods. The Act imposes obligations on the CEO to assess applications and make TCOs where appropriate, as well as on applicants to provide the necessary information and evidence to support their applications. The explanatory statement does not detail specific penalties for non-compliance, but it is reasonable to assume that such non-compliance could result in civil or criminal consequences.