EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000109
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 celebration scatters on 31 December 2009.
Instrument
TCO No 1000109 was made on 12 March 2010. It declares that those certain celebration scatters 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. 1000109 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 Tariff Concession Instrument No. 1000109, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions for specific goods, in this case certain celebration scatters, that are not produced in Australia and for which there are no substitutable goods domestically. This instrument was made by the Chief Executive Officer of Customs and is designed to lower the customs duty on specified goods, thereby facilitating their importation and potentially benefiting importers by allowing them to apply for duty refunds for imports made since the effective date of the concession. The process for making such concessions is governed by the Act, which mandates that applications meeting certain core criteria are to be approved, and includes a requirement for public consultation on the proposed concession. In this instance, the CEO received no submissions opposing the concession, leading to the issuance of the TCO on 12 March 2010, effective from 31 December 2009.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 1000109, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to persons or entities seeking to import specific goods into Australia, particularly when they wish to benefit from a reduced rate of customs duty. The scope of the Act encompasses those goods for which a TCO application can be made, provided they do not fall under the exclusions specified in section 269SJ of the Act. The application process requires that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as determined by the core criteria in sections 269C, 269D, and 269E. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, and the goods are assigned a prescribed tariff item, which in this case resulted in a reduction from a 5% duty rate to a free rate for certain celebration scatters. This concession applies nationally across Australia and is effective from the date the application was lodged, without retroactively affecting the rights of any person other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, as evidenced by Tariff Concession Instrument No. 1000109, establish the framework for Tariff Concession Orders (TCOs). Under section 269F, a person can apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. If the CEO is satisfied that the application meets the criteria set out in section 269C and does not involve goods specified in section 269SJ, the CEO must make a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. This particular TCO, issued on 12 March 2010, pertains to certain celebration scatters, which are now subject to item 50 of the Tariff, with the duty rate set at free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must ensure that the goods in question do not have substitutable products produced in Australia on the date the application is lodged. This requirement is detailed in section 269C, which defines the conditions under which no substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their views. The CEO must consider these submissions before making a decision. In this case, no submissions were received.
The Act also outlines specific consequences for breaches of its provisions. While the explanatory statement does not detail specific offences under this TCO, breaches of the Customs Act generally can lead to both civil and criminal penalties. Civil penalties can include fines and, in some cases, the seizure of goods. Criminal penalties can include imprisonment and fines, with the maximum penalties varying depending on the severity and nature of the offence. These penalties serve as a deterrent against non-compliance and ensure the integrity of the customs duty system.
For McPhersons Consumer Products, the benefits of this TCO are significant. Importers of the specified celebration scatters can now apply for a refund of duty on goods imported since the TCO was taken to have come into force on 31 December 2009, as per paragraph 126(1)(r) of the Regulations. This provision ensures that the rights of importers are beneficially affected without imposing any liabilities on any person, as explicitly stated in the Act. This legislative framework thus balances the interests of businesses and the government by providing tariff relief while maintaining regulatory oversight.