EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009277
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 barbeque sets on 22 February 2010.
Instrument
TCO No 1009277 was made on 07 May 2010. It declares that those certain barbeque sets 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. 1009277 is taken to have come into force on 22 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. 1009277, enacted in 2010, addresses a gap in the Customs Act 1901 by providing tariff concessions on specific goods. This instrument was introduced to facilitate tariff reductions for goods where no substitutable alternatives are produced in Australia, thus encouraging the importation of these goods. The instrument was made under the authority of the Customs Act 1901 by the Chief Executive Officer of Customs, following an application from McPhersons Consumer Products for tariff concessions on certain barbeque sets. The instrument specifies that these barbeque sets are subject to a zero rate of duty, down from the general rate of 5%, thereby benefiting importers who can now apply for duty refunds on imports of these goods from the date the instrument came into force, 22 February 2010. The process included a public consultation period, though no submissions were received.
Scope and Application
The Tariff Concession Instrument No. 1009277 under the Customs Act 1901 applies to the specific case of barbeque sets that were the subject of an application by McPhersons Consumer Products. This instrument grants tariff concessions by reducing the duty on these goods from the general rate of 5% to a free rate, provided that the application meets the core criteria set out in the Act, namely that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The application of the Act is limited to the Commonwealth jurisdiction, and the instrument was created to specifically address the import of these barbeque sets. The CEO’s decision to grant the concession was made without any objections being raised, and the instrument does not affect any pre-existing rights or liabilities of persons other than the Commonwealth. Any importer who has already paid duty on these goods prior to the instrument’s effective date can apply for a refund under the relevant regulations.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1009277 (referred to as TCO No. 1009277) are sections 269C, 269F, 269P, and 269S. Section 269F allows an applicant to request a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO) for certain goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, and that the goods are not specified in section 269SJ, then a TCO must be made under section 269P. These sections collectively establish the process and criteria for granting a TCO, which results in a lower rate of customs duty on the specified goods.
The obligations and requirements imposed by the Act on parties or entities governed by it include the duty of the CEO to assess whether an application meets the core criteria, which involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made, as stipulated in section 269K. If no objections are received, the CEO must proceed to make the TCO. Additionally, under section 269S, the TCO is considered to come into force on the day the application was lodged, meaning that the tariff concession is effective retroactively from that date.
The consequences for breaches of the Act are not explicitly stated in the explanatory statement but would generally involve civil or criminal penalties for non-compliance with the Act's provisions. Under Australian law, breaches of customs regulations can result in penalties such as fines and, in severe cases, imprisonment. The specific penalties for breach would depend on the nature and severity of the breach, and would be determined according to the relevant sections of the Customs Act 1901 and any other applicable laws.
Overall, the legislation provides a clear framework for the application and granting of tariff concessions, with specific obligations on the CEO to assess and approve TCOs, as well as provisions for public consultation and the retrospective effect of TCOs. The consequences of non-compliance with the Act would likely include civil penalties and potentially criminal charges, depending on the circumstances of the breach.