EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014659
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 brushes on 25 March 2010.
Instrument
TCO No 1014659 was made on 11 June 2010. It declares that those certain brushes 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. 1014659 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 Customs Act 1901, enacted by the Australian Parliament, provides the framework for the regulation of customs duties and other charges on goods imported into or exported from Australia. This Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This legislative instrument, specifically Tariff Concession Instrument No. 1014659, was introduced to address the need for concessional tariff rates on specific goods, ensuring they are accessible and affordable for consumers and businesses. The Tariff Concession Order No. 1014659 was made on 11 June 2010 for certain brushes, effectively reducing their duty from 5% to free, following an application by McPherson's Consumer Products. The CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria set out in section 269C of the Act. This order came into effect on the date the application was lodged, 25 March 2010, and does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1014659 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO). These goods, which in this instance are certain brushes, are eligible for reduced or free customs duty rates as per the prescribed item in Schedule 4 of the Customs Tariff Act 1995. The Act allows for a person to apply to the Chief Executive Officer of Customs for a TCO if certain conditions are met, particularly if no substitutable goods are produced in Australia in the ordinary course of business. The application process involves the CEO determining whether the application meets the core criteria as set out in the Customs Act 1901. The geographic and jurisdictional reach of this legislation is national, applying across Australia under the Commonwealth. The Act does not impose any liabilities on individuals or entities other than the Commonwealth, ensuring that the rights of importers are beneficially affected, with potential eligibility for duty refunds on goods imported since the TCO's effective date. This instrument does not specify any exclusions, exemptions, or thresholds beyond those outlined in the Customs Act 1901, and its application may be further defined through subordinate instruments.
Key Provisions
The Customs Act 1901, specifically under Part XVA, sets out the framework for Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S, and 269SJ). A TCO is an order made by the Chief Executive Officer of Customs (CEO) that reduces or eliminates the customs duty on certain goods, provided the application meets the specified criteria. If an applicant submits a request for a TCO, the CEO must determine if the application aligns with the core criteria (section 269C). This includes verifying that no substitutable goods were produced in Australia at the time the application was lodged (section 269P(3)). If the application meets these criteria, the CEO must issue a TCO, specifying the applicable tariff concession (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting public submissions on the application (section 269K(1)).
The obligations under the Act for entities such as McPherson's Consumer Products, who applied for a TCO, involve ensuring that their application meets the core criteria, which includes proving that no substitutable goods were produced in Australia. The CEO must then publish a notice in the Gazette and consider any submissions received. For the CEO, the obligations involve reviewing the application, making a decision based on the criteria, publishing a notice, and issuing a TCO if the application is approved. The CEO must also ensure that the TCO does not affect the rights of any person adversely or impose any liabilities on anyone other than the Commonwealth (subsection 269S(1)).
The Act does not explicitly outline specific offences or penalties for breaches related to the TCO process. However, non-compliance with the Act's provisions or the terms of a TCO could potentially lead to legal consequences under other sections of the Customs Act or related legislation. For instance, fraudulent applications or misrepresentations could attract penalties under general fraud or misrepresentation provisions in the Act or other relevant criminal laws. Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. However, specific penalties for breaches of the TCO process itself are not detailed in the provided sections.