EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009891
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 kitchenware on 25 February 2010.
Instrument
TCO No 1009891 was made on 30 April 2010. It declares that those certain kitchenware 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. 1009891 is taken to have come into force on 25 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. 1009891 was enacted in 2010 under the Customs Act 1901 to address the specific need for tariff concessions on certain goods. This legislative instrument was introduced to provide relief in the form of reduced or eliminated customs duties on particular items that meet certain criteria, thereby facilitating trade and potentially lowering costs for businesses and consumers. The instrument was developed in response to an application by Mcphersons Consumer Products for tariff concessions on certain kitchenware, which was subsequently approved by the Chief Executive Officer of Customs, who found that no substitutable goods were being produced in Australia. The policy objective of this instrument is to encourage the importation of goods that are not locally produced, thereby supporting economic activity and consumer choice.
The Customs Act 1901, as amended, empowers the CEO to make Tariff Concession Orders that apply lower rates of customs duty on specified goods, provided certain conditions are met. This particular instrument, TCO No. 1009891, was implemented to provide a zero-rate duty on the specified kitchenware, effectively removing the general 5% duty rate on these goods. The instrument came into effect on the date the application was lodged, 25 February 2010, and no submissions opposing the concession were received. Importantly, the instrument does not adversely affect the rights of any person as at the date of registration nor impose any new liabilities, although it does provide potential benefits to importers in the form of duty refunds.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 1009891, applies to entities and individuals seeking tariff concessions on imported goods. Specifically, it governs the application process for Tariff Concession Orders (TCOs) and the criteria under which such concessions are granted. This legislation is relevant to importers and businesses that may benefit from reduced customs duty rates on specific goods. The scope of this Act extends nationally across Australia, as it is a Commonwealth legislation. It does not apply to goods specified in section 269SJ of the Customs Act 1901, which outlines goods ineligible for tariff concessions. The Act is also complemented by subordinate instruments that further define terms such as "substitutable goods" and "ordinary course of business". The commencement date of the TCO is the date the application is lodged, and the TCO does not retroactively affect existing rights or impose liabilities for actions taken prior to its registration.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Instrument No. 1009891, revolve around the procedures for granting tariff concessions on certain goods. Section 269F of the Customs Act 1901 allows for applications to the Chief Executive Officer of Customs (CEO) for Tariff Concession Orders (TCOs), which reduce the customs duty on specified goods. Section 269C stipulates that a TCO application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D, 269E, and 269B. If the CEO is satisfied that the application meets these criteria, a TCO is issued under section 269P(3). In this case, TCO No. 1009891 was issued on 30 April 2010 for certain kitchenware, applying item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods.
The Act imposes several obligations and requirements on the parties it governs. The CEO must, under section 269K(1), publish a notice in the Gazette after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be granted. There were no submissions made in response to this notice for TCO No. 1009891. Additionally, the Act ensures that the TCO does not affect any pre-existing rights of individuals, except the Commonwealth, thereby protecting the rights of importers who can apply for duty refunds under paragraph 126(1)(r) of the Regulations.
In terms of consequences for breach, the legislation does not explicitly outline specific offences or penalties for non-compliance with the TCO provisions. However, any breaches of the underlying Customs Act 1901 or associated regulations could lead to civil or criminal penalties as prescribed by those acts. Given that TCO No. 1009891 aims to streamline the customs duty process and benefits importers by allowing duty refunds, it is crucial for all parties to adhere to the statutory requirements to avoid potential legal repercussions under the broader customs framework.