EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000105
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 birthday candles on 31 December 2009.
Instrument
TCO No 1000105 was made on 12 March 2010. It declares that those certain birthday candles 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. 1000105 is taken to have come into force on 31 December 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, facilitates the concession of tariff rates for certain goods through the creation of Tariff Concession Orders (TCOs). The Act was introduced to address the need for tariff concessions on goods that are not produced in Australia, thereby encouraging imports and supporting industries where local production is not feasible or competitive. TCOs provide a mechanism for the Chief Executive Officer of Customs to reduce the customs duty on specified goods, which must meet core criteria including the absence of substitutable goods produced in Australia. The policy objective of the Act, as outlined, is to benefit importers by potentially reducing their duty liabilities on certain goods, while ensuring that no existing rights or liabilities of non-Commonwealth entities are adversely affected. The Explanatory Statement for Tariff Concession Instrument No. 1000105 clarifies the application process and the effective date of the concession, illustrating how the Act operates to provide practical benefits in the import sector.
Scope and Application
The Tariff Concession Instrument No. 1000105, made under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO) granted by the Chief Executive Officer of Customs. This legislation enables the reduction of customs duty on certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument pertains to birthday candles, which were subject to an application by McPhersons Consumer Products on 31 December 2009, and it came into force on the same date. The instrument operates nationally, affecting entities involved in the importation of these goods across Australia. The CEO of Customs is required to consult with the public before making a TCO, and in this case, no submissions were received against the concession. The concession does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1000105 under the Customs Act 1901 (section 269P(3)) establish the procedure for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for specified goods. According to section 269C, for a TCO to be issued, the CEO must determine that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B further clarifies that these terms are defined in sections 269D, 269E and 269F. A TCO application can be made by any person under section 269F, provided the goods are not specified in section 269SJ as ineligible for a TCO.
The obligations imposed by this legislation require the CEO to assess TCO applications against the core criteria outlined in section 269C. This includes verifying that substitutable goods were not produced in Australia on the application date. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made. McPhersons Consumer Products' application for a TCO on birthday candles was subject to these provisions, and after no objections were received, a TCO was issued on 12 March 2010.
Any breach of the provisions under this Act may lead to civil or criminal consequences, although specific offences and penalties are not detailed in the explanatory statement. The Act's framework suggests that improper applications or misrepresentations could potentially lead to legal actions. The TCO itself does not impose liabilities on any person but instead provides benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations. This ensures that the rights of importers are protected and not disadvantaged by the issuance of the TCO.