EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014664
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 cleaning heads on 25 March 2010.
Instrument
TCO No 1014664 was made on 18 June 2010. It declares that those certain hollowware cleaning heads 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. 1014664 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. 1014664 was enacted in 2010 as a legislative tool under the Customs Act 1901. It was introduced to address the gap in tariff concessions for specific goods that are not produced domestically, thereby allowing for a more competitive import market. The instrument was developed in response to an application by McPherson's Consumer Products for tariff concessions on certain hollowware cleaning heads. The instrument was enacted by the Chief Executive Officer of Customs, pursuant to the provisions of the Customs Act, which empower them to make Tariff Concession Orders under certain conditions. The policy objective of the instrument is to facilitate the import of goods that do not have Australian-made equivalents, thereby supporting the efficient operation of the market and potentially benefiting consumers through lower prices.
Scope and Application
The Tariff Concession Instrument No. 1014664 under the Customs Act 1901 applies to persons or entities seeking a reduction in customs duty on specific goods, in this case, hollowware cleaning heads. This instrument is pertinent to the import industry, particularly those importing these goods into Australia. The Act applies on a national level across Australia, administered by the Chief Executive Officer of Customs, who must assess whether the application for tariff concessions meets the core criteria outlined in the Act. Notably, the Act excludes certain goods from tariff concessions as specified in section 269SJ, which includes goods that are or can be produced in Australia for similar uses. The application process involves scrutiny to ensure that the goods in question are not substitutable by Australian-produced items. The geographic reach of this legislation is federal, impacting all states and territories uniformly. The commencement of the tariff concession takes effect from the date the application was lodged, which in this case was 25 March 2010, and the tariff concession order itself came into force on the same date. Additionally, the instrument does not retroactively disadvantage any party or impose liabilities for actions taken prior to its registration.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to the Tariff Concession Instrument No. 1014664 include sections 269F (s.269F), 269C (s.269C), 269B (s.269B), 269D (s.269D), 269E (s.269E), and 269P (s.269P(3)). Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be met for an application to be considered, including the absence of substitutable goods produced in Australia at the time the application is lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) requires the CEO to make a written order if the application meets the core criteria, specifying the tariff item under the Customs Tariff Act 1995 that applies to the goods.
The obligations imposed by the Customs Act 1901 on the parties and entities governed by it include the requirement for the CEO to assess TCO applications against the core criteria. The CEO must ensure that no substitutable goods were produced in Australia at the time the application is made. The CEO is also required to publish a notice in the Gazette inviting submissions from interested parties if a TCO application is accepted as valid, as stipulated in subsection 269K(1). McPherson's Consumer Products, as the applicant, must provide sufficient information to demonstrate that the goods in question do not have substitutable equivalents produced in Australia.
The Customs Act 1901 includes provisions for offences, penalties, and consequences for breach. While the explanatory statement does not specify the exact penalties for non-compliance with the TCO provisions, it is understood that failure to adhere to the requirements may result in civil or criminal consequences. The specific penalties would be determined by other relevant sections of the Act or associated regulations. It is important for applicants and the CEO to ensure that all obligations are met to avoid any potential legal repercussions.