EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1019461
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 tableware and or kitchenware pads on 29 April 2010.
Instrument
TCO No 1019461 was made on 19 July 2010. It declares that those certain tableware and or kitchenware pads 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. 1019461 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 was amended to introduce the scheme for Tariff Concession Orders (TCOs) as a means to provide lower rates of customs duty on certain goods. This was enacted to ensure that Australian industries, particularly those unable to produce certain goods domestically, are not unduly disadvantaged by high import tariffs. The Tariff Concession Instrument No. 1019461, made under this scheme, was introduced to provide a specific tariff concession for certain tableware and kitchenware pads, which had an application submitted by McPherson's Consumer Products on 29 April 2010. The instrument, which came into force on the same date, declares that these goods are subject to a free rate of duty, as no substitutable goods were produced in Australia on the date of application. The policy objective of this concession is to support the competitive position of Australian businesses by reducing the cost of imported goods, thereby potentially increasing their market share and economic benefits within Australia.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 1019461, pertains to the application and administration of Tariff Concession Orders (TCOs) within the Australian jurisdiction. This Act applies to any individual or entity seeking tariff concessions for specific goods, with the primary focus being on goods for which an application has been made and approved by the Chief Executive Officer of Customs (CEO). The application process outlined in section 269F requires that the goods in question are not specified in section 269SJ, which lists items ineligible for tariff concessions, and must meet the core criteria stipulated in sections 269C, 269B, and 269D. The instrument’s geographic reach is national, applying uniformly across Australia. TCO No. 1019461, which came into force on 29 April 2010, specifically grants a tariff concession on certain tableware and kitchenware pads, reducing their duty rate from 5% to free, contingent on the CEO's satisfaction that no substitutable goods are produced in Australia. The Act does not impose liabilities on persons other than the Commonwealth, and benefits such as duty refunds for importers are available as per the Regulations.
Key Provisions
The Customs Act 1901, as amended, includes provisions for Tariff Concession Orders (TCOs) which are a significant instrument for adjusting the customs duty rates on specific goods. Section 269F (1) of the Act allows for an application to be made by any person to the Chief Executive Officer (CEO) of Customs for a TCO. This application process is governed by section 269C, which stipulates that the CEO must determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged. This determination is crucial as it affects the rate of customs duty applicable to the goods in question.
The obligations imposed by the Act on the CEO include verifying that the application does not pertain to goods that cannot be subject to a TCO, as outlined in section 269SJ. Furthermore, the CEO must ensure that the application aligns with the core criteria specified in section 269C. This involves a detailed assessment of whether the goods in question are substitutable by any Australian-produced goods, a term defined in section 269D, and whether these Australian goods are produced in the ordinary course of business, as defined in section 269E. If the CEO is satisfied that the application meets these criteria, they are required to issue a written TCO, as per section 269P(3), which declares that the specified goods will be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Non-compliance with the Act’s requirements for TCOs can lead to various consequences. While the Act does not explicitly outline specific offences, penalties, or consequences for breaches related to the TCO process, any failure to adhere to the stipulated procedures and criteria could potentially result in legal challenges or administrative actions. The Act ensures that the rights of individuals are not adversely affected by the issuance of a TCO, as stated in section 269S(1). This includes ensuring that importers can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The Act explicitly states that the TCO does not impose any liabilities on any person other than the Commonwealth.
In summary, the Tariff Concession Order No. 1019461, issued under the Customs Act 1901, provides a specific reduction in customs duty for certain tableware and kitchenware pads. The process is stringent, requiring a thorough assessment by the CEO to ensure compliance with the Act’s criteria. While the Act does not detail specific penalties for breaches, adherence to the outlined procedures is critical to avoid potential legal ramifications.