EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000110
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 racks on 31 December 2009.
Instrument
TCO No 1000110 was made on 26 March 2010. It declares that those certain racks 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. 1000110 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 Parliament of Australia, provides a framework for the regulation of customs and excise in Australia. To address the issue of providing tariff concessions on certain goods, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This process was established to ensure that Australian businesses can access imported goods at a reduced duty rate, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective of this legislative scheme is to promote fair competition and provide economic benefits to Australian businesses by reducing the cost of importing specific goods.
The Tariff Concession Instrument No. 1000110, made in 2010, exemplifies the application of this legislative framework. McPhersons Consumer Products applied for a TCO concerning certain racks, and after meeting the core criteria, the CEO issued a TCO effective from 31 December 2009, granting a duty-free rate on these goods. This instrument was made without any submissions opposing the TCO, thereby streamlining the process and ensuring that the rights of importers are protected while providing them with a beneficial tariff concession.
Scope and Application
The Tariff Concession Instrument No. 1000110 under the Customs Act 1901 applies to the specific goods for which McPhersons Consumer Products applied, namely certain racks, and is effective as of the date the application was lodged on 31 December 2009. The Act pertains to the process through which the Chief Executive Officer of Customs can grant tariff concessions, effectively reducing or eliminating customs duties on specified goods if certain criteria are met. This legislation is pertinent to entities and individuals involved in the importation of these specified goods, allowing them to benefit from reduced duty rates. The scope of the Act extends across the Commonwealth of Australia, as it is a federal law, and it applies to all goods that meet the eligibility criteria outlined in the Customs Act 1901. Notably, the Act excludes certain goods from tariff concessions as per section 269SJ, which lists those that cannot be subject to a Tariff Concession Order. The Act also allows for the issuance of subordinate instruments to further detail the application and enforcement of the tariff concessions, thereby extending or refining its application.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269F, 269P(3), and 269K(1)) establish the framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer (CEO) of Customs. Section 269F allows a person to apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order, a TCO, declaring that the goods are subject to a prescribed rate of duty. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made.
The obligations and requirements imposed by the Act on parties and entities include the duty of the CEO to evaluate the TCO application against the criteria in section 269C and to consider any submissions received pursuant to section 269K(1). Once the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269P(3)). The Act further mandates that the TCO will be taken to have come into force on the date the application was lodged, as stated in section 269S(1). The rights of importers under the TCO are protected, with the provision for a refund of duty on goods imported since the date the TCO is taken to have come into force, as outlined in the Regulations.
Any breach of the requirements under this legislation may result in civil or criminal consequences. The Act does not explicitly state the penalties for non-compliance, but it is implied that failure to adhere to the specified procedures for making a TCO could lead to disputes over the validity of the order or the rate of duty applied. The CEO’s decision to make a TCO is subject to judicial review if there is evidence of procedural unfairness or incorrect application of the law. Additionally, any misrepresentation or fraudulent application for a TCO could result in criminal charges under the relevant sections of the Customs Act 1901 or other applicable laws.