EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100243
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 travel sets on 4 January 2011.
Instrument
TCO No 1100243 was made on 28 March 2011. It declares that those certain travel sets 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. 1100243 is taken to have come into force on 4 January 2011.
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 Australian Parliament, provides a framework for the regulation of customs and excise through a series of tariffs and concessions. One of the mechanisms within this framework is the Tariff Concession Order (TCO), introduced to address the need for tariff reductions on specific goods to promote trade and economic efficiency. The 2011 Explanatory Statement outlines Tariff Concession Instrument No. 1100243, which was made to provide a tariff concession for certain travel sets, lowering the customs duty from the general rate of 5% to free. The policy objective behind this specific TCO was to ensure that the travel sets in question, for which no substitutable goods were produced in Australia, would benefit from reduced tariffs, thus encouraging their importation and potentially their sale, thereby benefiting consumers and the broader market.
Scope and Application
The Tariff Concession Instrument No. 1100243 is an instrument made under Part XVA of the Customs Act 1901, which facilitates the application of lower rates of customs duty on certain goods through the creation of Tariff Concession Orders (TCOs). This particular instrument applies to McPherson's Consumer Products in respect of certain travel sets, which, as of 4 January 2011, the day the application was lodged, are now subject to a free rate of duty instead of the general 5% rate. The Act applies to the CEO of Customs, who must decide on the eligibility of a TCO application based on whether substitutable goods are produced in Australia. The CEO is mandated to make a written order if the application meets the core criteria, which include the absence of substitutable goods produced in Australia on the date of application. This instrument has a national reach and applies across the Commonwealth of Australia, impacting the import duties for goods specified in the order. No exclusions or exemptions are explicitly stated within this instrument, although it is subject to the broader provisions of the Customs Act 1901 and the Customs Tariff Act 1995. The instrument came into force on the date the application was lodged, 4 January 2011, without affecting any pre-existing rights or imposing liabilities on any person.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 1100243 under the Customs Act 1901, establish the process for granting tariff concessions for certain goods. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria specified in section 269C. If the CEO is satisfied that the application meets these criteria, a written order (TCO) is made under section 269P(3), declaring the goods subject to the order and applying a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any application for a TCO is valid and meets the core criteria. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons why the TCO should not be made. In this case, no submissions were received in response to the notice.
Regarding the consequences of non-compliance or breaches, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to adhere to the provisions of a TCO. However, the general provisions of the Customs Act would apply, which could include fines, penalties, or legal action for non-compliance with customs regulations. The specific penalties would depend on the nature and severity of the breach, but they could include fines under section 228 of the Act for providing false or misleading information in an application or for contravening the terms of a TCO. The maximum penalties for such offences can be substantial, reflecting the seriousness of non-compliance with customs laws.