EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0945608
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 toe separtator on 02 January 2009.
Instrument
TCO No 0945608 was made on 20 March 2009. It declares that those certain toe separtator 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. 0945608 is taken to have come into force on 02 January 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 amended to include the Tariff Concession Orders (TCO) scheme, introduced to provide relief to importers by allowing the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. This was enacted to address the problem of high customs duties on goods for which no suitable Australian-made alternatives exist, thereby encouraging the import of these goods and potentially stimulating local production over time. The policy objective is to facilitate the import of goods that cannot be substituted by Australian-made products, thus benefiting importers by reducing their duty costs. McPhersons Consumer Products applied for a TCO concerning certain toe separators, which was subsequently approved by the CEO, resulting in a tariff concession instrument that came into force on the date of application. This legislative change was overseen by the Australian Parliament and is intended to support importers by lowering duty rates on specific goods, ultimately contributing to more competitive pricing and potentially encouraging local production in the future.
Scope and Application
The Tariff Concession Instrument No. 0945608 under the Customs Act 1901 applies specifically to the process of granting tariff concessions on certain goods, allowing for a lower rate of customs duty for goods that meet the criteria outlined in the Act. This legislation applies to any person or entity seeking a tariff concession order from the Chief Executive Officer of Customs, provided that the goods in question are not specified in section 269SJ of the Act, which excludes certain types of goods from being subject to a tariff concession order. The instrument extends to the Commonwealth jurisdiction, and it is designed to ensure that tariff concession orders are only granted when no substitutable goods are produced in Australia in the ordinary course of business, as stipulated by section 269C of the Act. The application of this instrument may be further defined or restricted through subordinate instruments, which may specify additional criteria or conditions under which tariff concessions are granted. The tariff concession order, once made, affects the rights of importers beneficially by allowing them to apply for a refund of duty on goods imported since the day the order came into force, without imposing any new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, specifically sections 269C, 269F, 269P, and 269S, establish the framework for the application, consideration, and implementation of Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C stipulates the core criteria that must be met for the CEO to consider a TCO application, which includes ensuring no substitutable goods are produced in Australia on the day the application is lodged. Section 269P mandates that if the CEO is satisfied that the application meets the core criteria, a written order must be made declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S outlines the commencement date of a TCO, which is the day the application for the TCO was lodged. In this case, TCO No. 0945608 applies to certain toe separators, reducing their duty rate from the general rate of 5% to free.
The obligations imposed by this Act on the parties primarily rest on the CEO of Customs. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the proposed TCO from any person who believes the TCO should not be made. In this instance, no submissions were received, implying a general acceptance or lack of opposition to the proposed concession. The CEO must also ensure that the application meets the core criteria as outlined in section 269C before making a written order. Section 269SJ further restricts the types of goods that can be subject to a TCO, ensuring that only appropriate goods are considered for tariff concessions.
The Act outlines specific offences, penalties, and consequences for breaches. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 generally carry significant civil and criminal consequences. For example, under section 216 of the Customs Act, any person who contravenes the Act, including provisions related to the improper claiming of tariff concessions, can face penalties. The maximum penalty for a corporation can be significant, often indexed to the maximum penalty units prescribed by law, which can be substantial. Criminal penalties can include imprisonment, reflecting the seriousness with which the Australian government treats customs violations.
In summary, this legislation provides a clear framework for the application and implementation of TCOs, ensuring that tariff concessions are granted only under specific conditions and without adversely affecting existing rights or imposing new liabilities. The obligations on the CEO are significant, requiring careful consideration and public consultation before any TCO is made. The potential for both civil and criminal penalties underscores the importance of compliance with the Act's provisions.