EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000111
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 pegs on 31 December 2009.
Instrument
TCO No 1000111 was made on 12 March 2010. It declares that those certain pegs 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. 1000111 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. 1000111, enacted in 2010, pertains to the Customs Act 1901, which outlines a framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs. This instrument was introduced to address the need for tariff concessions on certain goods, specifically those for which no substitutable goods are produced in Australia in the ordinary course of business, thereby providing relief in the form of reduced or free customs duty. The enactment of this instrument by the relevant authority within the Australian government aims to support industries that rely on imported goods by reducing their costs, and ensuring competitive fairness in the marketplace.
The process of issuing a TCO under the Customs Act 1901 involves an application by a person to the CEO, who then evaluates the application against specific criteria, such as the absence of substitutable goods produced domestically. Upon meeting these criteria, a TCO is issued, which modifies the customs duty rate for the specified goods. In the case of McPhersons Consumer Products, a TCO was issued for certain pegs on 31 December 2009, effective from that date, and exempting these goods from a 5% duty rate, thereby providing a direct benefit to the rights of importers who can apply for duty refunds on goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 1000111 under the Customs Act 1901 applies to the goods specified in the instrument, in this case certain pegs, and to any parties involved in the importation of these goods. The application of this instrument is confined to the conditions outlined in the Customs Act 1901, specifically those concerning Tariff Concession Orders (TCOs). The geographic reach of this Act is national, as it is administered by the Commonwealth through the Chief Executive Officer of Customs. The instrument exempts the specified goods from the general rate of customs duty, which is 5%, and instead subjects them to a duty rate of free. It is important to note that this concession does not apply to goods that are substitutable and produced in Australia, as per the definitions and criteria outlined in the Customs Act 1901. The application of this legislation can be further detailed or modified through subordinate instruments, which may specify additional conditions or criteria for TCOs.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1000111 under the Customs Act 1901 (section 269F) allow for the application by a person to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thus applying a lower rate of customs duty (section 269P(3)). The core criteria include ensuring that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C).
The Act imposes certain obligations on the CEO, including accepting a valid application for a TCO and ensuring that the application meets the core criteria (section 269F). The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, and consider any submissions received (subsection 269K(1)). The CEO must make the TCO within a specified timeframe after the application is accepted as valid.
Failure to comply with the requirements of the Act and the Tariff Concession Instrument No. 1000111 may result in civil or criminal consequences. The Act does not specify particular offences or penalties for breach of the TCO provisions; however, general penalties for breaches of the Customs Act 1901 may apply. These can include fines and imprisonment for serious offences. The exact penalties depend on the specific nature and severity of the breach. The Act ensures that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the date of registration (subsection 269S(1)).