EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000114
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 bags on 01 January 2010.
Instrument
TCO No 1000114 was made on 22 March 2010. It declares that those certain bags 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 10%. 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. 1000114 is taken to have come into force on 01 January 2010.
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 enacted to regulate the import and export of goods in Australia, and it includes provisions for Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on certain goods. The problem or gap addressed by this legislation is the facilitation of trade by providing tariff concessions that encourage the import of goods that are not produced domestically, thereby benefiting consumers and potentially aiding in the development of local industries by providing cheaper alternatives. The instrument in question, Tariff Concession Instrument No. 1000114, was introduced by the Chief Executive Officer of Customs under the authority granted by the Customs Act 1901. This particular instrument, which was published in the Gazette on 22 March 2010, concerns a Tariff Concession Order for certain bags applied for by McPhersons Consumer Products on 1 January 2010. The policy objective here is to ensure that such concessions do not disadvantage any existing rights holders while promoting the economic benefit of reduced duty rates to importers and, ultimately, consumers.
Scope and Application
The Tariff Concession Instrument No. 1000114, made under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, in this case certain bags, and provides for a lower rate of customs duty when compared to the general rate. The instrument was applied for by McPhersons Consumer Products on 1 January 2010 and was subsequently made by the Chief Executive Officer of Customs on 22 March 2010, effective from the date the application was lodged. The Act applies to entities and individuals involved in the importation of these specific goods, effectively reducing their customs duty liability from the general rate of 10% to free of charge. The scope of this instrument is national, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. Any person who considers that there are reasons why the Tariff Concession Order should not be made could have lodged a submission with the CEO; however, in this case, no submissions were received.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in the context of Tariff Concession Orders (TCOs), include sections 269F, 269C, 269B, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. Section 269C sets out the criteria that must be met for the application to be considered valid, specifically requiring that no substitutable goods are produced in Australia at the time the application is lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," while section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must issue a written TCO.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that the application for a TCO is valid and meets the criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a TCO as specified in section 269P(3). Additionally, the CEO must publish a notice in the Gazette, inviting any interested party to submit objections or submissions regarding the application. This is outlined in subsection 269K(1). For the TCO in question, no objections were received, allowing the TCO to proceed as planned.
The Act also delineates consequences for non-compliance or breaches related to TCOs. Although the explanatory statement does not specify detailed penalties, it is implied that failure to adhere to the requirements for applying for or issuing a TCO could lead to legal ramifications. The Customs Act 1901, in conjunction with other relevant legislation, may provide for penalties, which could range from fines to more severe legal actions depending on the nature and severity of the breach. For instance, if an entity were to misrepresent information in a TCO application, they could face criminal charges under the Act or related statutes, potentially resulting in substantial fines or imprisonment.
It is important to note that the explanatory statement clarifies that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration. This means that any pre-existing rights or obligations of individuals or entities will not be adversely impacted by the TCO. Additionally, the TCO does not impose any new liabilities on any person. Importers, however, will benefit from the TCO by being able to apply for a refund of duty on goods imported since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations. This provision ensures that those who have already imported goods before the TCO came into effect are not disadvantaged.