EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944790
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 bathroom and or toilet articles on 25 November 2009.
Instrument
TCO No 0944790 was made on 29 January 2010. It declares that those certain bathroom and or toilet articles 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. 0944790 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 Customs Act 1901 was enacted by the Parliament of Australia to provide for the administration of customs and excise duties and the control of imports and exports. One of its provisions, under Part XVA, allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. These orders can lower the rate of customs duty for certain goods, provided they meet specific criteria and no substitutable goods are produced in Australia. The instrument F2010L01232, or Tariff Concession Instrument No. 0944790, was introduced to address the need for tariff concessions for certain bathroom and toilet articles, as applied for by McPhersons Consumer Products on 25 November 2009. The policy objective behind this specific TCO is to support the importation of these goods by eliminating customs duty, thereby potentially lowering costs for consumers and encouraging market competition. The instrument came into force on the date of application, 25 November 2009, and the rights of importers are positively affected as they may apply for duty refunds for goods imported since this date.
Scope and Application
The Tariff Concession Instrument No. 0944790 pertains to the Customs Act 1901 and is applicable to persons and entities seeking tariff concessions for specific goods. This Act applies to those who make an application to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) in respect of goods, provided that the application does not concern goods explicitly excluded under section 269SJ of the Act. The primary focus is on facilitating tariff concessions for imported goods that are not produced in Australia, thus benefiting importers by potentially reducing their customs duty liabilities. Geographically, the application of this legislation is national, as it is a Commonwealth Act. The legislation does not specify any exclusions or exemptions other than those mentioned in section 269SJ. Any further application or restriction of the Act's provisions may be defined through subordinate instruments, which could provide additional criteria or procedural requirements for TCO applications.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) that govern Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P. Section 269F enables an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO concerning particular goods. If the application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO, the CEO must determine whether the application meets the core criteria specified in section 269C. If the CEO is satisfied that the application meets the core criteria, they must issue a written order (a TCO) as stated in section 269P(3).
The Act imposes specific obligations on the CEO and applicants for TCOs. The CEO is obligated to ensure that any application for a TCO is not in respect of goods prohibited under section 269SJ. Upon accepting a valid application, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made. The CEO is also responsible for determining whether the application meets the core criteria outlined in section 269C. If the core criteria are satisfied, the CEO must issue a written TCO.
The Act does not explicitly outline offences or penalties for non-compliance with the provisions regarding TCOs. However, it is implied that any breach of the conditions set out in the TCO or failure to comply with the Act's requirements could result in legal consequences. For example, if an entity knowingly imports goods that are subject to a TCO but fails to claim the tariff concession, they may be subject to civil or criminal penalties under other relevant legislation. The specific penalties would depend on the nature of the breach and the applicable laws at the time.
In the case of McPhersons Consumer Products, the CEO issued TCO No. 0944790 on 29 January 2010, declaring that certain bathroom and toilet articles are subject to a concessional rate of duty. This TCO was made after McPhersons Consumer Products applied for it on 25 November 2009, and the CEO was satisfied that no substitutable goods were produced in Australia. The TCO came into effect on the date of the application, 25 November 2009, and the general rate of duty for these goods was reduced from 5% to free. The CEO published a notice in the Gazette but did not receive any submissions opposing the TCO. This TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO was registered.