EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111089
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 kitchenware sets on 01 April 2011.
Instrument
TCO No 1111089 was made on 20 June 2011. It declares that those certain kitchenware 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. 1111089 is taken to have come into force on 01 April 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 Parliament of Australia, provides a framework for the regulation of imports and exports, including the imposition of customs duty on imported goods. The Act includes provisions for Tariff Concession Orders (TCOs) that can reduce or eliminate customs duty on specific goods under certain conditions. One such concession is the Tariff Concession Instrument No. 1111089, made on 20 June 2011, which was designed to address the problem of ensuring that Australian consumers and businesses have access to competitively priced goods by reducing or eliminating duty on specific imported items where no suitable Australian-made alternatives exist. The instrument was introduced to provide relief to McPherson's Consumer Products by allowing them to import certain kitchenware sets duty-free, as no substitutable goods were being produced in Australia. This measure was intended to support the policy objective of fostering fair competition and consumer choice within the Australian market.
Scope and Application
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. This mechanism is available to entities or individuals seeking to import specific goods for which a TCO can be applied, provided that these goods are not specified in section 269SJ of the Act and meet the core criteria outlined in sections 269B, 269C, 269D, and 269E. The Act applies nationally across Australia, covering both the Commonwealth and state jurisdictions, as it is a federal statute. The scope of the Act extends to any goods not prohibited from TCOs, ensuring that the concessions are granted in the absence of substitutable goods produced in Australia. The TCOs are effective from the date the application is lodged, as per subsection 269S(1) of the Act, and they do not retroactively affect any rights or impose liabilities on persons other than the Commonwealth regarding activities conducted prior to the TCO's registration.
Key Provisions
The Customs Act 1901, as amended, establishes a framework under which Tariff Concession Orders (TCO) can be made by the Chief Executive Officer of Customs (CEO) (section 269F). Section 269C outlines the core criteria for a TCO, which must be satisfied by the CEO before a TCO can be issued. Specifically, the application must be for goods that are not substitutable by any goods produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO determines that these criteria are met, they must issue a written TCO, specifying the particular item in Schedule 4 of the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)).
The obligations imposed by the Act on the CEO include evaluating the TCO application against the core criteria (section 269C) and, if satisfied, publishing a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be granted (subsection 269K(1)). Once a TCO is issued, the CEO must ensure that the rights of importers are beneficially affected and that any applicable refunds of duty can be processed for imports since the effective date of the TCO (subsection 269S(1), paragraph 126(1)(r) of the Regulations). The TCO does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth as at the date of registration.
For breaches of the provisions related to TCOs, the Customs Act 1901 provides for potential civil and criminal penalties. While the explanatory statement does not detail specific penalties, breaches of customs legislation generally can attract significant fines and, in some cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any applicable provisions in the Customs Act 1901 or other relevant legislation. It is important for parties involved in the TCO process to comply fully with the statutory requirements to avoid these potential consequences.