EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009895
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 sets on 25 February 2010.
Instrument
TCO No 1009895 was made on 21 May 2010. It declares that those certain kitchenware 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. 1009895 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, establishes a framework for the regulation of customs duties and related matters. To address the need for tariff concessions, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for reduced customs duty rates on specific goods, provided certain criteria are met. The explanatory statement for Tariff Concession Instrument No. 1009895, enacted in 2010, details an application by McPhersons Consumer Products for a TCO on certain kitchenware sets. The CEO of Customs found that no substitutable goods were produced in Australia, satisfying the core criteria for a TCO. Consequently, Instrument TCO No. 1009895 was issued, declaring that the specified kitchenware sets are subject to a duty rate of free, down from the general rate of 5%. The policy objective of this instrument is to provide tariff relief to importers of the specified goods, without imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities seeking a reduction in customs duties on imported goods that meet certain criteria. The scope of this Act is national, as it is a Commonwealth Act, affecting all importers within Australia. The Act provides a process for an applicant to apply for a TCO, provided the goods in question are not excluded under section 269SJ. For an application to be considered, it must meet the core criteria outlined in section 269C, which essentially means that there are no substitutable goods produced in Australia on the date the application was lodged. The Act also includes provisions for public consultation as per section 269K, although in the case of TCO No. 1009895, no submissions were received. Once a TCO is made, it comes into force on the date the application was lodged, as per subsection 269S(1), and it does not retroactively affect the rights or impose liabilities on any party for actions taken before the TCO was issued. This TCO specifically benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria set out in section 269C, and no submissions are received opposing the application as required by section 269K, the CEO is required to make a written order, the TCO, declaring the goods subject to the application as qualifying for a lower rate of customs duty (section 269P). Section 269S specifies the commencement date of the TCO, which is the day the application was lodged.
The obligations imposed by the Act on the parties governed by it are primarily procedural. The CEO must ensure that the application for a TCO is valid and meets the core criteria (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (section 269K). The applicant, in this case Mcphersons Consumer Products, must provide all necessary information to the CEO to enable the determination of whether the application meets the core criteria.
In the event of a breach of the conditions under which a TCO is made, or if an incorrect application of the concessions is attempted, there may be civil or criminal consequences. While specific offences and penalties are not detailed within the explanatory statement, breaches of customs regulations typically result in penalties that can include fines and, in severe cases, imprisonment. The maximum penalties for such breaches can vary depending on the specific nature and severity of the offence, but they are generally prescribed under the Customs Act 1901 or the Crimes Act 1914. The TCO itself, however, does not impose any liabilities on any person, as clarified under the legislation.