EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105239
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 salt and pepper shaker sets on 07 February 2011.
Instrument
TCO No 1105239 was made on 02 May 2011. It declares that those certain salt and pepper shaker 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. 1105239 is taken to have come into force on 07 February 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 was amended by the Tariff Concession Instrument No. 1105239, which was enacted in 2011 to address the need for tariff concessions for specific goods. This instrument was introduced to facilitate the application process for Tariff Concession Orders (TCOs) under Part XVA of the Customs Act, enabling the Chief Executive Officer of Customs to lower the rate of customs duty for certain imported goods. The instrument was developed to ensure that tariff concessions are granted when there are no substitutable goods produced in Australia, thereby protecting Australian industries from unfair competition. This legislative change was made to streamline the application process for tariff concessions, providing clearer criteria for eligibility and ensuring transparency and fairness in the customs duty regime. The policy objective behind this instrument is to support Australian businesses and importers by providing them with access to cheaper imported goods, thus promoting competitive pricing and consumer choice.
Scope and Application
The Customs Act 1901, under its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) through the Chief Executive Officer (CEO) of Customs, who may grant a TCO for specific goods upon application if certain criteria are met. This Act applies to any person seeking a concession for goods that are not specified in section 269SJ, which excludes certain goods from being subject to a TCO. The application process requires the CEO to determine if no substitutable goods are produced in Australia and if the goods in question are not produced domestically in the ordinary course of business. Once a TCO is granted, the goods in question are subject to a reduced rate of customs duty as specified in the order, which may be free of charge depending on the item of the Customs Tariff Act 1995 Schedule 4. The CEO must also publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO being made. The TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth, and any rights of importers are positively impacted, as they may apply for a refund of duties on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1105239 (sections 269C, 269P, and 269S) establish the framework for the application and issuance of Tariff Concession Orders (TCOs) under the Customs Act 1901. These sections outline the criteria that must be met for a TCO to be issued, including that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). If these criteria are satisfied, the Chief Executive Officer of Customs (CEO) must issue a written order granting the tariff concession (section 269P). The instrument also specifies that a TCO is effective from the date the application is lodged (section 269S).
The Act imposes several obligations and requirements on the parties involved. McPherson's Consumer Products, the applicant in this case, must ensure their application meets the core criteria, which involves demonstrating that no substitutable goods are produced in Australia. The CEO must review the application and verify compliance with the statutory requirements. Furthermore, the CEO is mandated to publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted (section 269K). In this instance, no submissions were received, allowing the TCO to proceed without opposition.
There are no explicit offences, penalties, or consequences mentioned in the text for failing to comply with the provisions of the TCO or the Customs Act. However, the implications of non-compliance could include legal challenges or disputes over the validity of the TCO, which could potentially lead to the revocation of the concession if found to be improperly granted. The instrument itself does not detail specific penalties but adheres to the broader legal framework under which it operates, which may include civil or criminal penalties for more serious breaches of the Customs Act.