EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014412
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.
McPherson's Consumer Products applied for a TCO in respect of certain towel holders on 24 March 2010.
Instrument
TCO No 1014412 was made on 11 June 2010. It declares that those certain towel holders 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. 1014412 is taken to have come into force on 24 March 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 was amended to include the Tariff Concession Orders (TCO) scheme, enabling the Chief Executive Officer of Customs to reduce customs duties on certain goods. Enacted by the Parliament of Australia, the scheme aims to provide tariff concessions on goods where no substitutable products are produced domestically. Specifically, McPherson's Consumer Products applied for and received a TCO for certain towel holders, resulting in a duty reduction from 5% to free. This concession was granted as no suitable Australian-made alternatives were identified. The process involved publishing a notice in the Gazette to invite objections, none of which were received. The TCO, effective from the date of the application, benefits importers by allowing them to claim duty refunds for imports since that date, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1014412, made under Part XVA of the Customs Act 1901, applies specifically to the goods of McPherson's Consumer Products, namely certain towel holders, which are granted a concession on customs duty as of the date of the application, 24 March 2010. This instrument was issued by the Chief Executive Officer of Customs and is applicable to the importation of these specific goods into Australia. The instrument ensures that the application meets the core criteria outlined in the Act, particularly the absence of substitutable goods produced in Australia at the time the application was lodged, which allows for the tariff concession to be granted. The tariff concession reduces the duty on these goods from the general rate of 5% to free, effective from the date of the application. This instrument also mandates the publication of the application in the Gazette to allow for any objections, though none were received in this instance. The commencement of this order is governed by the provisions of the Customs Act 1901, ensuring that no existing rights or liabilities are adversely affected.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1014412 (TCO No. 1014412) are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C requires that an application for a Tariff Concession Order (TCO) meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, a written order must be made. Section 269S specifies that a TCO is deemed to have come into force on the day the application was lodged.
The Customs Act 1901 imposes specific obligations on both applicants and the CEO. Applicants must ensure that their application meets the core criteria, particularly that no substitutable goods are produced in Australia. The CEO has the duty to assess applications against these criteria, make written orders if satisfied, and publish notices in the Gazette inviting submissions from any interested parties. In this case, the CEO did not receive any submissions in response to the notice.
The Customs Act 1901 does not explicitly detail offences, penalties, or consequences for breaches related to TCOs. However, non-compliance with the conditions set out in a TCO could potentially lead to legal actions under other sections of the Act. For example, if an entity imports goods without adhering to the terms of the TCO, they could face penalties under the general customs duty provisions. Although the specific penalties for breaching a TCO are not outlined in the explanatory statement, the overarching framework of the Customs Act provides a basis for enforcement and potential sanctions.