EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009893
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 cookie cutter sets on 25 February 2010.
Instrument
TCO No 1009893 was made on 07 May 2010. It declares that those certain cookie cutter 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. 1009893 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 Customs Act 1901, enacted by the Parliament of Australia, introduced a scheme to provide tariff concessions on certain goods through Tariff Concession Orders (TCOs). This legislative framework was designed to address the need for tariff reductions on specific goods where Australian production does not exist or is not economically viable. The Act allows the Chief Executive Officer of Customs to make these orders, provided that the application meets core criteria, notably that no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 1009893, made under this Act on 7 May 2010, illustrates the process whereby McPhersons Consumer Products applied for and was granted a TCO for certain cookie cutter sets, resulting in a tariff reduction from 5% to free. The policy objective underpinning these concessions is to support Australian businesses by reducing costs associated with importing goods that cannot be locally produced, thus fostering competitiveness and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 1009893 applies to the importation of specific cookie cutter sets, as detailed in the instrument. This instrument is a direct application of Part XVA of the Customs Act 1901, which governs the scheme for Tariff Concession Orders (TCOs). The instrument is applicable to any person or entity importing the specified cookie cutter sets into Australia, with the condition that these goods are not produced in Australia in the ordinary course of business and there are no substitutable goods available domestically. The geographic reach of this instrument is national, affecting all states and territories within Australia. It is pertinent to note that the instrument does not impose any disadvantage or liabilities on persons other than the Commonwealth, nor does it affect any rights as they stood on the date of registration. The instrument came into effect on 25 February 2010, the date on which the application for the TCO was lodged, and it specifies a reduction in customs duty from the general rate of 5% to a rate of duty that is free, thereby extending the benefits to importers of these goods.
Key Provisions
The key provisions of the Tariff Concession Order No. 1009893 under the Customs Act 1901 (section 269F) allow the Chief Executive Officer of Customs (CEO) to consider applications for tariff concession orders (TCOs) on certain goods. If the CEO determines that the application meets the core criteria, they must issue a written order granting the tariff concession (section 269P(3)). In this case, McPhersons Consumer Products applied for a TCO for certain cookie cutter sets, and the CEO issued TCO No. 1009893 on 7 May 2010, declaring that these sets are subject to a 5% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO came into effect on the date the application was lodged, 25 February 2010.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application is not for goods specified in section 269SJ, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria under section 269C, they must make a TCO. The CEO must also publish a notice in the Gazette inviting submissions on the application (subsection 269K(1)). In this instance, the CEO did not receive any submissions against the TCO. Additionally, the TCO does not affect the rights of any person except the Commonwealth, nor does it impose any liabilities on any person in respect of actions taken before the TCO's registration.
The Customs Act 1901 does not explicitly outline offences, penalties, or consequences for breaches related to TCOs. However, general provisions within the Act and associated regulations may apply. For example, any misleading or deceptive conduct in relation to the application or the TCO itself could be subject to penalties under consumer protection laws, although these are not specified in the explanatory statement. The Act ensures that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's registration, thereby protecting the rights of importers who may apply for duty refunds on goods imported since the TCO's effective date.