EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111090
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 1111090 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. 1111090 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, facilitates the application of tariff concession orders (TCOs) to specific goods, aiming to provide relief from customs duties under certain conditions. The introduction of Tariff Concession Instrument No. 1111090 in 2011 addresses the need for a streamlined process to apply for and grant tariff concessions on goods that are not produced in Australia and for which no substitutable goods are available domestically. This legislative measure ensures that the Chief Executive Officer of Customs can effectively evaluate applications and make informed decisions based on the criteria set out in the Act. The policy objective is to support the importation of goods that are not domestically produced, thereby fostering trade and benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Customs Act 1901 applies to the entire Commonwealth of Australia and regulates the importation and exportation of goods, including the imposition of customs duty on imported goods. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs under certain conditions, providing a lower rate of customs duty on specified goods. McPherson's Consumer Products successfully applied for a TCO for certain kitchenware sets, which were declared to have a free rate of duty instead of the general rate of 5%. The TCO is effective from the date the application was lodged, in this case, 01 April 2011, and does not disadvantage or impose liabilities on any person in relation to actions taken before the registration date. The CEO published a notice inviting submissions in the Gazette, but did not receive any, allowing the TCO to proceed without opposition. The TCO affects importers by potentially entitling them to a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1111090 under the Customs Act 1901 (section 269P) provide for the creation of a Tariff Concession Order (TCO) that grants a lower rate of customs duty on certain specified goods. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for such a concession, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C sets out the core criteria for a TCO, which must be met on the day the application is lodged, and this involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must then make a written order if satisfied that these criteria are met, as outlined in section 269P(3).
The Act imposes several obligations on the parties involved. The applicant, in this case McPherson's Consumer Products, must ensure that their application meets the specified criteria, particularly the requirement that no substitutable goods were produced in Australia. The CEO has the obligation to assess the application against these criteria and, if satisfied, to make the TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections or submissions, as stipulated in subsection 269K(1). If the CEO does not receive any submissions, this process allows for transparency and ensures that all interested parties have had an opportunity to voice any objections.
There are no specific offences outlined in the explanatory statement; however, any failure to comply with the provisions of the Customs Act 1901 or the terms of the TCO could potentially lead to civil or criminal consequences. The penalties for breaches of the Customs Act could include fines or imprisonment, depending on the severity of the breach. Although the explanatory statement does not detail specific maximum penalties, it is understood that contraventions of the Act can attract significant penalties under Australian law. Additionally, any party adversely affected by the TCO could potentially seek judicial review or other remedies in a court of law.