EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014416
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 picture hangers on 24 March 2010.
Instrument
TCO No 1014416 was made on 11 June 2010. It declares that those certain picture hangers 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. 1014416 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 enacted by the Commonwealth Parliament to regulate the importation and exportation of goods in Australia. It establishes a framework for imposing customs duty on goods entering or leaving the country. The Act was introduced to address the need for a structured system to manage and tax goods traded internationally, ensuring compliance and revenue collection. Part XVA of the Act specifically provides a mechanism for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain goods, provided they meet specified criteria. This mechanism was designed to foster trade by making imported goods more affordable and competitive with locally produced alternatives. The explanatory statement outlines the process and criteria for TCOs, including the role of the Chief Executive Officer of Customs in assessing applications and making orders. The policy objective is to facilitate international trade by potentially lowering the cost of imported goods, thereby benefiting consumers and businesses that rely on these imports.
Scope and Application
The Tariff Concession Instrument No. 1014416 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO). The Act enables the Chief Executive Officer of Customs (CEO) to make TCOs, which provide a lower rate of customs duty for certain goods. This applies to McPherson's Consumer Products, which applied for a TCO for certain picture hangers. The instrument applies to these picture hangers, granting them a tariff concession. The Act applies nationally as it is a Commonwealth instrument, and its provisions extend across all states and territories in Australia. There are exclusions for goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must ensure that no substitutable goods are produced in Australia for the application to meet the core criteria, as outlined in sections 269C, 269D, 269E, and 269F of the Act. The instrument’s application and its effects are subject to the Act’s provisions, and any subordinate instruments may further define or expand its application.
Key Provisions
The main operative sections of this legislation focus on the process and criteria for the issuance of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO. Section 269C outlines the core criteria that an application must meet, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). If the CEO is satisfied that the application meets these criteria, they must make a written TCO order, as stated in section 269P(3).
The obligations imposed by the Act on the parties involved are primarily on the CEO. The CEO must assess whether the application meets the core criteria and, if satisfied, issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as required by subsection 269K(1). McPherson's Consumer Products, as the applicant, must ensure their application is valid and meets the core criteria specified by the Act.
Offences and penalties for breach of this legislation are not explicitly detailed in the provided text. However, the Act's framework implies that failure to comply with the stipulated procedures or making false statements in an application could potentially lead to civil or administrative penalties. The specific consequences of non-compliance are not mentioned, but they might include fines or the invalidation of the TCO. The Act does not specify maximum penalties, but breaches of similar customs regulations typically incur significant financial penalties.