EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944793
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 birchwood sticks on 25 November 2009.
Instrument
TCO No 0944793 was made on 29 January 2010. It declares that those certain birchwood sticks 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. 0944793 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, enacted by the Australian Parliament, introduced a scheme to allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods. This was introduced to address the gap in tariff rates for goods that are not produced domestically and do not have substitutable alternatives in Australia. The policy objective behind this is to support the import of goods that are not locally produced, thereby encouraging trade and providing consumers with access to a wider variety of products. McPhersons Consumer Products applied for a TCO in respect of certain birchwood sticks on 25 November 2009, and after determining that no substitutable goods were produced in Australia, the CEO issued Tariff Concession Order No. 0944793 on 29 January 2010. This order effectively grants a duty-free status to the specified birchwood sticks, with the general duty rate for these goods being 5%. The TCO came into force on the day the application was lodged, and the decision did not affect any pre-existing rights or impose any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0944793 applies to the customs duty concessions for specific goods, namely certain birchwood sticks, as determined by the Chief Executive Officer of Customs under the Customs Act 1901. The Act provides a mechanism for tariff concessions to be granted to applicants, such as McPhersons Consumer Products, when the CEO determines that the goods in question do not have substitutable goods produced in Australia and meet the core criteria specified in the Act. The instrument is effective from the date the application was lodged, which is 25 November 2009, and it applies on a national level across Australia as part of the Commonwealth's regulatory framework. Notably, the application of this TCO does not disadvantage any existing rights of persons other than the Commonwealth and does not impose any new liabilities on them. This legislative instrument is an extension of the Customs Act 1901, which is the primary statute governing customs duties in Australia.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order (TCO) No. 0944793, are sections 269F, 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is deemed valid and meets the core criteria as stipulated in section 269C, the CEO is required under section 269P to issue a written order granting the concession. This order declares that the goods in question are to be subject to a prescribed rate of duty specified in the Customs Tariff Act 1995. Definitions pertinent to this process, such as "substitutable goods" and "ordinary course of business," are provided in sections 269B and 269E respectively.
The obligations imposed on the parties governed by this Act include the requirement for applicants to ensure that their applications are valid and meet the core criteria. For the CEO, the obligations include evaluating applications, determining whether they meet the criteria, and, if so, issuing the TCO. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. This notice is a crucial step to ensure transparency and allow for public scrutiny of the concession application.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. Under section 270 of the Act, there are penalties for providing false or misleading information in support of an application for a TCO. Such offences are subject to civil and criminal penalties, including fines and imprisonment. Specifically, under section 270(2), the maximum penalty for providing false or misleading information is 5,000 penalty units or imprisonment for five years, or both, for a corporation, and 1,000 penalty units or imprisonment for one year, or both, for an individual. Furthermore, any person found guilty of contravening the Act may also be subject to additional civil penalties as prescribed by the regulations.
In summary, Tariff Concession Order No. 0944793 under the Customs Act 1901 provides a mechanism for reducing customs duty on certain goods, subject to specific criteria. The Act imposes clear obligations on both the applicant and the CEO to ensure that the concessions are granted fairly and transparently. Breach of the Act's provisions can result in severe civil and criminal penalties, thereby enforcing compliance with the legislative requirements.