EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014658
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 knife racks on 25 March 2010.
Instrument
TCO No 1014658 was made on 18 June 2010. It declares that those certain knife racks 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. 1014658 is taken to have come into force on 25 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 Tariff Concession Instrument No. 1014658, enacted in 2010, is a legislative instrument under the Customs Act 1901, which addresses the need to grant tariff concessions for specific goods, thereby facilitating trade by reducing customs duty rates. This instrument was introduced to provide a streamlined process for tariff concessions, ensuring that the Chief Executive Officer of Customs can efficiently respond to applications for lower customs duty rates on goods not produced in Australia. The instrument was developed and enacted by the Australian Government, with a policy objective to support economic efficiency and trade facilitation by ensuring that importers of certain goods can benefit from reduced duty rates. The instrument allows for the application of a zero percent customs duty rate on certain knife racks, as opposed to the general rate of 5%, provided no substitutable goods are produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 1014658 under the Customs Act 1901 applies to the specific goods, namely certain knife racks, as identified by Mcphersons Consumer Products in their application to the Chief Executive Officer of Customs. This legislation is relevant to the industry involved in the importation and sale of these goods, ensuring that they are subject to a reduced customs duty rate under the prescribed terms. The instrument's jurisdictional reach is within the Commonwealth of Australia, with the application and enforcement of the tariff concession order falling under federal jurisdiction. The Act does not specify exclusions or exemptions apart from those detailed in section 269SJ of the Customs Act 1901, which pertains to goods that cannot be subject to a TCO. The application of the Act may be further defined or extended through subordinate instruments, although the primary legislation outlines the core criteria for tariff concessions and the specific process for granting them.
Key Provisions
The main operative sections of the Customs Act 1901, relevant to this Tariff Concession Order (TCO), are sections 269C, 269B, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the application meets the core criteria specified in section 269C, the CEO must make a written order, as outlined in section 269P(3). The goods must not be specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Furthermore, section 269B defines terms such as 'goods produced in Australia' and 'ordinary course of business', while section 269E defines 'ordinary course of business'.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs is required to assess the application against the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers that the TCO should not be made. Additionally, if the CEO decides to proceed with the TCO, they must make a written order declaring that the goods in question are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of the Act in the context of this TCO. However, if the CEO determines that a TCO application does not meet the core criteria, they are not required to make the TCO, and the application process may be rejected. This means that applicants could face the continued application of the general rate of duty unless they successfully meet all the criteria for a TCO.
The TCO, once made, has retrospective effect from the date the application was lodged, which in this case is 25 March 2010. This means that the concessional rate of duty applies to goods imported from that date onwards. Importantly, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken before the TCO was registered. Importers of the goods will benefit from this order by being able to apply for a refund of duty on goods imported since the TCO's effective date.