EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008761
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 baby bottles on 18 February 2010.
Instrument
TCO No 1008761 was made on 14 May 2010. It declares that those certain baby bottles 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. 1008761 is taken to have come into force on 18 February 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 Tariff Concession Instrument No. 1008761, enacted under the Customs Act 1901, was introduced to provide a lower rate of customs duty on certain goods, specifically baby bottles, which were previously subject to a higher general duty rate of 5%. The instrument was created in response to an application by McPhersons Consumer Products on 18 February 2010, aiming to address the economic burden on consumers by reducing the cost of these essential items. The enactment of this tariff concession was authorised by the Chief Executive Officer of Customs, who confirmed that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria outlined in section 269C of the Act. The tariff concession order came into effect on the same date the application was lodged, providing immediate benefits to importers who could now apply for refunds on duties paid on these goods since the effective date.
Scope and Application
The Tariff Concession Instrument No. 1008761 under the Customs Act 1901 applies to a specific category of goods, namely certain baby bottles, for which McPhersons Consumer Products applied for a tariff concession order (TCO) on 18 February 2010. This instrument was enacted to provide a concession on customs duty for these goods, reducing the general rate of duty from 5% to free, provided that no substitutable goods were produced in Australia at the time of the application. The legislation is designed to benefit importers of these baby bottles by allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force on 18 February 2010. The application of this TCO does not disadvantage any person or impose liabilities on any person other than the Commonwealth for actions taken before the TCO's registration date. The TCO’s scope and application are governed by the Customs Act 1901, and the specific conditions and criteria for making such concessions are outlined in the Act, with the process overseen by the Chief Executive Officer of Customs.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1008761 under the Customs Act 1901 (section 269P(3)) involve the granting of a Tariff Concession Order (TCO) that allows for a lower rate of customs duty on certain goods. Specifically, this instrument, effective from 18 February 2010, pertains to certain baby bottles and declares that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, which sets the duty rate at free, as opposed to the general rate of 5%.
The obligations and requirements imposed by this Act on the parties or entities it governs include ensuring that the goods in question are not substitutable by any goods produced in Australia. The CEO of Customs must determine that no such substitutable goods are produced in the ordinary course of business in Australia before issuing a TCO (section 269C). The application process requires that the applicant, in this case McPhersons Consumer Products, submit a formal application to the CEO, who must then make a decision based on the core criteria set forth in the Act.
The Act also outlines potential consequences for non-compliance or misuse of the TCO provisions. However, the explanatory statement does not specify any particular offences, penalties, or civil/criminal consequences for breach in the context of this TCO. The notice published in the Gazette serves as a public invitation for objections, and in this instance, none were received. The Act ensures that the rights of the Commonwealth and importers are protected, with specific provisions allowing importers to apply for a refund of duty on goods imported since the TCO came into effect.