EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944792
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.
McPherson's Consumer Products Pty Ltd applied for a TCO in respect of certain pillow protectors on 25 November 2009.
Instrument
TCO No 0944792 was made on 05 February 2010. It declares that those certain pillow protectors 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. 0944792 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. 0944792, made under the Customs Act 1901, was enacted to facilitate tariff concessions for certain goods, thereby reducing the customs duty rate for those goods. The instrument was introduced to address the need for tariff concessions in specific cases where no substitutable goods were produced in Australia. This concession allows for a more streamlined and cost-effective import process for these particular goods. The instrument was made by the Chief Executive Officer of Customs, in accordance with section 269F of the Act, after McPherson's Consumer Products Pty Ltd applied for the concession on 25 November 2009. The instrument was published in the Gazette, inviting any interested parties to submit objections; however, no objections were received. The tariff concession came into effect on the date of the application, 25 November 2009, and benefits importers by potentially allowing them to apply for a refund of duty on goods imported since that date, without imposing any liabilities on other persons.
Scope and Application
The Tariff Concession Instrument No. 0944792 under the Customs Act 1901 applies to specific goods, in this case certain pillow protectors, that are subject to a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs to grant TCOs that provide a lower rate of customs duty for goods that meet certain criteria. The legislation applies to any person or entity seeking a reduction in customs duty on goods that are not substitutable by Australian-produced goods. The TCO No. 0944792 was made for McPherson's Consumer Products Pty Ltd, and it exempts the specified pillow protectors from the general customs duty rate of 5%, instead applying a duty rate of free. This instrument has a Commonwealth jurisdictional reach and its provisions are effective from the date the application for the TCO was lodged, which in this case was 25 November 2009. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons in relation to actions taken before the TCO's registration date. Subordinate instruments can further extend or detail the application of this Act.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0944792 under the Customs Act 1901 are primarily found in sections 269F, 269C, 269P(3), and 269SJ. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning specific goods. If the CEO determines that the application complies with the core criteria outlined in section 269C, they must issue a written TCO. This order is effective from the date the application was lodged as per section 269S(1). Section 269P(3) mandates that the CEO must make the TCO if satisfied that the application meets the core criteria, while section 269SJ specifies goods that cannot be subject to a TCO.
The obligations imposed on the parties or entities governed by this Act are primarily administrative. McPherson's Consumer Products Pty Ltd, for instance, must submit a valid application to the CEO, ensuring that it adheres to the criteria stipulated in sections 269C and 269SJ. The CEO is required to review the application, consult if necessary, and decide whether to grant the TCO. Once a TCO is issued, McPherson's Consumer Products Pty Ltd can benefit from the reduced duty rate, and importers can seek refunds for any duties paid before the TCO's effective date.
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Order can result in various penalties. For example, incorrect or fraudulent applications for TCOs may lead to civil or criminal consequences. The Act does not explicitly state the maximum penalties for such breaches, but general provisions under the Customs Act and related legislation could apply. These may include fines or imprisonment, depending on the severity of the breach. Additionally, any misuse of the TCO, such as importing non-compliant goods under the guise of a tariff concession, could also result in legal repercussions.
In summary, the Tariff Concession Instrument No. 0944792 under the Customs Act 1901 provides a structured process for reducing customs duties on specific goods. It outlines the requirements for applicants and the responsibilities of the CEO. While the Act does not specify maximum penalties for breaches, it implies that non-compliance could lead to significant civil or criminal consequences, reinforcing the importance of adhering to the stipulated guidelines and obligations.