EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014660
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 hollowware cleaners on 25 March 2010.
Instrument
TCO No 1014660 was made on 11 June 2010. It declares that those certain hollowware cleaners 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. 1014660 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. 1014660, enacted in 2010 under the Customs Act 1901, addresses the need for tariff concessions for specific goods not produced in Australia, ensuring they do not face prohibitive import duties. This legislative instrument was introduced to facilitate tariff reductions for certain hollowware cleaners, which are not produced domestically and thus do not have substitutable goods in Australia. The Tariff Concession Order (TCO) was made by the Chief Executive Officer of Customs following an application by McPherson's Consumer Products, who sought to import these goods tariff-free. The policy objective is to support importers by reducing the customs duty on these specific goods, thus making them more competitively priced in the Australian market without imposing any additional liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for certain goods, thereby applying a lower rate of customs duty. This Act applies to any person or entity seeking tariff concessions for goods that are not produced in Australia in the ordinary course of business, as defined by the Act. The TCO mechanism is designed to benefit industries by providing lower duty rates for imported goods that do not have domestic alternatives. The geographic reach of this Act is national, applying across all states and territories of Australia. However, certain goods specified in section 269SJ of the Act are ineligible for tariff concessions. The application process involves an assessment by the CEO to ensure the goods meet the core criteria, which includes the absence of substitutable goods produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 1014660 details that McPherson's Consumer Products successfully applied for a TCO for certain hollowware cleaners, resulting in a duty-free status for these goods. This instrument came into effect on the date of application, 25 March 2010, and does not retroactively affect the rights or liabilities of any person, except to potentially benefit importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The key operative sections of this legislation focus on the process of applying for and granting Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F of the Act allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. This application process is governed by section 269C, which stipulates that the CEO must consider whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. This is further defined in sections 269D and 269E, which outline the meaning of "goods produced in Australia" and "ordinary course of business," respectively. Section 269P(3) requires that if the CEO is satisfied that the application meets the core criteria, they must issue a written TCO.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must ensure that the application for a TCO is valid and meets the criteria set out in the Act. Once an application is deemed valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions, indicating a lack of opposition to the TCO. Additionally, section 269S(1) specifies that a TCO is considered to come into force on the date the application was lodged, in this case, 25 March 2010.
The legislation also addresses potential breaches and consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance with the Act or the TCO, it is implicit that failure to adhere to the requirements could result in legal repercussions. The Act's provisions aim to ensure that the process for granting TCOs is transparent and fair, and any deviations from these requirements could lead to administrative or legal consequences. The explanatory statement clarifies that the TCO does not affect the rights of individuals or impose liabilities on them for actions taken before the TCO was registered, thereby protecting existing rights and ensuring that the concession does not retroactively impose new obligations or liabilities.