EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1019453
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 brush storage pouches on 29 April 2010.
Instrument
TCO No 1019453 was made on 17 August 2010. It declares that those certain brush storage pouches 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. 1019453 is taken to have come into force on 29 April 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 Parliament of Australia, establishes a framework through which the Chief Executive Officer of Customs can create Tariff Concession Orders (TCOs). These orders allow for lower customs duties on specified goods, provided certain conditions are met. Specifically, a TCO may be issued if no substitutable goods are produced in Australia at the time the application is lodged, and the goods are not among those excluded by section 269SJ of the Act. The policy objective behind this mechanism is to support Australian industry by reducing import duties on goods that are not produced domestically, thereby encouraging local production and economic growth.
The Tariff Concession Instrument No. 1019453, issued on 17 August 2010, provides a concrete example of this legislative framework in action. McPhersons Consumer Products applied for a TCO concerning certain brush storage pouches on 29 April 2010. Following a review and finding that no substitutable goods were produced in Australia, the CEO issued TCO No. 1019453, granting a tariff concession that reduced the duty on these specific goods from the general rate of 5% to free. The TCO came into effect on the date of the application, 29 April 2010, and it benefits importers by allowing them to apply for a refund of duty on goods imported since that date.
Scope and Application
The Customs Act 1901, through Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking tariff concessions for specific goods, provided these goods are not listed in section 269SJ which details goods ineligible for TCOs. The scope of the Act extends across the Commonwealth of Australia, and its application is facilitated through subordinate instruments that may further define or refine the criteria and procedures. Notably, the Act ensures that no person other than the Commonwealth is disadvantaged by the registration of a TCO, thereby safeguarding existing rights and imposing no retroactive liabilities. The Act's jurisdictional reach is comprehensive, applying to all relevant goods and entities within Australia, with the commencement of a TCO aligning with the date of the application.
Key Provisions
The Tariff Concession Instrument No. 1019453 pertains to a specific case under the Customs Act 1901, where a Tariff Concession Order (TCO) was issued for certain brush storage pouches. According to section 269F of the Act, an application for a TCO can be made by a person to the Chief Executive Officer of Customs (CEO). The CEO is mandated to consider whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. In this instance, the CEO was satisfied that the application for the brush storage pouches met these criteria, leading to the issuance of TCO No. 1019453 on 17 August 2010, as per subsection 269P(3). This order specifies that these pouches are subject to a zero rate of duty, as detailed in item 50 of Schedule 4 to the Customs Tariff Act 1995, whereas the general rate of duty would have been 5%.
Entities and individuals subject to the provisions of this Act must adhere to the application process and criteria specified in sections 269F and 269C. Any person wishing to apply for a TCO must ensure that their application complies with the stipulated conditions. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties, as per subsection 269K(1). In the case of TCO No. 1019453, no submissions were received in response to the published notice. The obligation on the CEO to assess the application and make a decision within the legislative framework ensures transparency and fairness in the process.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the issuance of a TCO. However, the broader provisions of the Customs Act 1901 and associated regulations would still apply, potentially imposing penalties for non-compliance with customs regulations. Any failure to adhere to the conditions or misrepresentation in the application process could lead to legal repercussions, including fines and other penalties as stipulated under the Act. The rights of importers are protected, and they may apply for a refund of duty paid on these goods since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that pre-existing rights and obligations remain unaffected.