EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009278
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 foot files on 22 February 2010.
Instrument
TCO No 1009278 was made on 30 April 2010. It declares that those certain foot files 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. 1009278 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. 1009278, enacted in 2010 under the Customs Act 1901, addresses the issue of applying for tariff concessions for specific goods that do not have substitutable alternatives produced in Australia. This instrument was created to streamline the process whereby the Chief Executive Officer of Customs can grant tariff concessions, thereby reducing the customs duty for certain imported goods. The instrument was developed by the relevant legislature, specifically the Parliament of Australia, with a policy objective to facilitate the import of goods that are not domestically produced and thus encourage trade without imposing additional burdens on importers. By providing a clear pathway for such tariff concessions, the legislation aims to benefit importers by potentially reducing their costs and enhancing their competitive position.
Scope and Application
The Tariff Concession Instrument No. 1009278 under the Customs Act 1901 applies specifically to goods for which an application for tariff concession has been made and subsequently approved by the Chief Executive Officer of Customs. This instrument is directly concerned with the application and approval of tariff concession orders (TCOs) for specific goods, in this case, certain foot files. The instrument is applicable to any person or entity that imports or intends to import the specified goods and aims to provide a lower rate of customs duty for these goods. Geographically, the application of this TCO is confined within the Commonwealth of Australia, aligning with the broader framework established by the Customs Act 1901. The TCO does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The application of the TCO is further regulated by subordinate instruments, which may include regulations or additional guidelines that refine the application process and criteria for tariff concessions. The TCO does not impose any new liabilities or disadvantage existing rights of any party other than the Commonwealth, ensuring that the rights of importers are beneficially affected by the reduced duty rates.
Key Provisions
Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO, they must then determine if the application meets the core criteria outlined in section 269C. A TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P(3) of the Act respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written order (TCO) under section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities it governs include the requirement for the CEO to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO must also ensure that the application meets the core criteria and, if satisfied, make a written order declaring that the goods are subject to a prescribed tariff concession. The Act also requires the CEO to ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. Although the explanatory statement does not specify the exact penalties for breach, it is likely that penalties would be determined by the relevant court, taking into account the severity of the breach and any mitigating factors. The explanatory statement does not provide information on maximum penalties for breach of the Act.
In conclusion, the Customs Act 1901 provides a scheme under which Tariff Concession Orders may be made by the CEO of Customs. The Act imposes obligations on the CEO to ensure that applications for TCOs meet the core criteria and are published in the Gazette. Failure to comply with the requirements of the Act may result in civil or criminal consequences, although the exact penalties are not specified in the explanatory statement. The TCO in question, No. 1009278, declares that certain foot files are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with a general rate of duty on these goods being 5% and a rate of duty for the goods subject to the TCO being free.