EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944777
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 catch and throw sets on 25 November 2009.
Instrument
TCO No 0944777 was made on 5 February 2010. It declares that those certain catch and throw sets 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. 0944777 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. 0944777 was enacted under the Customs Act 1901 to address the issue of tariff concessions for specific goods not produced in Australia. This legislation was introduced to provide relief to importers by reducing or eliminating customs duty on certain goods, thereby enhancing the competitiveness of these goods in the Australian market. The instrument was initiated by McPhersons Consumer Products, which applied for a tariff concession order (TCO) concerning catch and throw sets. The instrument was processed and approved by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for the concession. The policy objective was to ensure that Australian consumers and businesses could access these goods at a reduced cost, promoting economic efficiency and consumer choice.
The instrument was made effective from 25 November 2009, the date the application was lodged, and it declared that the catch and throw sets in question would be subject to a duty rate of free, down from the general rate of 5%. The instrument did not receive any submissions opposing the concession, and it was published in the Gazette as required by the Act. Importantly, the TCO did not affect the rights of any person other than the Commonwealth and did not impose any liabilities on anyone. Importers of the affected goods were granted the right to apply for a refund of duty paid before the TCO came into effect.
Scope and Application
The Tariff Concession Instrument No. 0944777 under the Customs Act 1901 applies to goods specified in the application made by McPhersons Consumer Products for certain catch and throw sets. The Act governs the process through which a Tariff Concession Order (TCO) can be issued by the Chief Executive Officer of Customs (CEO), thereby providing a lower rate of customs duty on the specified goods. The application must meet certain criteria, such as the absence of substitutable goods produced in Australia, as outlined in sections 269C and 269SJ of the Act. The CEO's decision to grant the TCO is based on ensuring that the application does not pertain to goods that are ineligible under section 269SJ. This instrument extends the application of the Customs Act 1901 to specifically include the customs duty concessions for the goods in question, which is free of charge under item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act applies nationally across Australia, and the TCO has been in effect since 25 November 2009, the date the application was lodged. No submissions were received in opposition to the TCO, and the rights of importers are beneficially affected as they can now apply for duty refunds from the commencement date of the TCO.
Key Provisions
Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. If the application is for goods that are not prohibited by section 269SJ, the CEO must assess whether the application meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the day of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed on parties under this Act include ensuring that any application for a TCO is made in accordance with the provisions of section 269F and that the application complies with the core criteria. The CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid, as stipulated in subsection 269K(1). The CEO must also ensure that no substitutable goods are produced in Australia in the ordinary course of business when deciding on the application, in line with the definitions provided in sections 269D and 269E.
Failure to comply with the provisions of the Act can result in civil or criminal consequences. Subsection 269P(3) specifies that if the CEO is not satisfied that a TCO application meets the core criteria, they must refuse to make the order. While the Act does not explicitly state penalties for non-compliance, breaches of related customs regulations can attract penalties under the Customs Act 1901. These penalties may include fines and, in some cases, imprisonment. The maximum penalties are determined by the specific provisions of the Customs Act 1901 and related regulations.