EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1019460
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 mascara brushes on 29 April 2010.
Instrument
TCO No 1019460 was made on 19 July 2010. It declares that those certain mascara 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. 1019460 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, provides a framework for managing customs duties and related matters. One significant feature of this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under section 269F, which allow for lower rates of customs duty on specified goods, provided certain criteria are met. The problem this legislation addresses is the need to encourage the importation of goods that are not produced domestically, thereby fostering competition and potentially lowering consumer prices. The explanatory statement for Tariff Concession Instrument No. 1019460, issued on 19 July 2010, pertains to a specific TCO application by McPherson's Consumer Products for certain mascara brushes, which were granted a tariff concession due to the absence of substitutable goods produced in Australia. The policy objective is to ensure that such concessions benefit importers by allowing them to apply for refunds of duty paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1019460 under the Customs Act 1901 applies to the specific goods identified in the instrument, namely certain mascara brushes, and is applicable to entities such as McPherson's Consumer Products that have applied for and received a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. This legislation operates on a national level, with the Customs Act being a Commonwealth Act, and therefore applies across Australia. The TCO provides a tariff concession on these goods, reducing the duty from the general rate of 5% to free, provided the application for the TCO met the core criteria, which in this case involved a determination that no substitutable goods were produced in Australia in the ordinary course of business. The scope of the TCO is limited to the goods specified in the instrument and does not extend to other goods or industries unless similarly applied for and granted. The TCO’s commencement date is retroactive to the date the application was lodged, 29 April 2010, and it does not affect any existing rights or impose new liabilities on persons other than the Commonwealth. The process includes mandatory public consultation as per the Act, although in this instance, no submissions were received.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1019460, made under the Customs Act 1901, include sections 269C, 269P, and 269S. Section 269C outlines the core criteria for a Tariff Concession Order (TCO), stating that an application will meet these criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires the Chief Executive Officer (CEO) of Customs to make a written order if satisfied that the application meets these criteria, and Section 269S details the commencement of the TCO, which is effective from the date the application was lodged. In this specific case, McPherson's Consumer Products applied for a TCO for certain mascara brushes, and the CEO issued TCO No. 1019460 on 19 July 2010, declaring the brushes as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes certain obligations on the parties it governs. For example, applicants for a TCO must ensure their applications meet the core criteria specified in section 269C. The CEO has the duty to assess these applications and decide whether they meet the criteria, as outlined in section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons, as per section 269K(1). In this case, McPherson's Consumer Products fulfilled the application requirement, and the CEO issued the TCO as no submissions opposing the order were received.
The Customs Act 1901 includes provisions for penalties and consequences for breaches. Although specific offences and penalties are not detailed in the explanatory statement, breaches of the Act generally result in civil or criminal penalties. Civil penalties may include fines and other financial penalties, while criminal offences can lead to imprisonment. The exact penalties would depend on the nature and severity of the breach, as outlined in other sections of the Act and related regulations. The TCO itself does not impose any liabilities on any person, ensuring that rights and liabilities as of the registration date remain unaffected.