EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111091
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 on 01 April 2011.
Instrument
TCO No 1111091 was made on 20 June 2011. It declares that those certain tableware and/or kitchenware 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. 1111091 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 Tariff Concession Instrument No. 1111091 was enacted in 2011 under the Customs Act 1901 to address a specific gap in tariff concession orders for certain goods. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions on goods, provided that no substitutable goods are produced in Australia in the ordinary course of business, thus facilitating lower rates of customs duty for qualifying imports. The Tariff Concession Order No. 1111091, made on 20 June 2011, pertains to certain tableware and kitchenware, reducing the duty rate from the general 5% to free of charge, effective from the date of application, 01 April 2011. The policy objective of this instrument is to ensure that the rights of importers are positively affected and to avoid any disadvantage or new liabilities imposed on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for reduced rates of customs duty on specified goods, provided the application adheres to the core criteria set out in the Act. Specifically, a TCO can be issued if, at the time of application, there are no substitutable goods produced in Australia in the ordinary course of business. The application process involves scrutiny to ensure the goods are not excluded under section 269SJ and that the core criteria are met, particularly the absence of domestically produced substitutable goods as defined under sections 269D, 269E, and 269F of the Act. The scope of this legislation applies to any person or entity seeking to import specified goods and benefits those who import goods subject to the TCO, potentially allowing for duty refunds under the Customs Regulations. The geographic reach of this legislation is national, with its application extending across all jurisdictions within Australia. The Explanatory Statement for Tariff Concession Instrument No. 1111091 clarifies that the TCO applies specifically to certain tableware and kitchenware, granting them a concession under item 50 of Schedule 4 to the Customs Tariff Act 1995, with a general duty rate of 5% reduced to free duty. The instrument does not disadvantage any persons other than the Commonwealth and imposes no liabilities on anyone.
Key Provisions
The Customs Act 1901, particularly under Part XVA, outlines a process for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specific goods. A TCO application can be submitted under section 269F, and if the CEO determines that the application is for goods not excluded by section 269SJ and meets the core criteria of section 269C, the CEO must issue a written order under section 269P(3). McPherson's Consumer Products applied for a TCO on 01 April 2011 for certain tableware and/or kitchenware, which was granted on 20 June 2011 as TCO No. 1111091, applying a free duty rate to these goods instead of the general 5% duty rate.
Under this legislation, the CEO has a set of obligations once an application for a TCO is received. The CEO must first ensure that the goods in question are not specified in section 269SJ, which excludes certain goods from TCO consideration. If the goods are eligible, the CEO must then verify if the application meets the core criteria stipulated in section 269C, which involves confirming that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are met, the CEO is required to make a written TCO under section 269P(3) and publish a notice in the Gazette inviting submissions from interested parties. McPherson's Consumer Products' application was processed without any submissions, indicating no opposition to the TCO.
In terms of legal consequences, if the CEO fails to adhere to the requirements of the Customs Act 1901, there could be significant repercussions. However, the explanatory statement does not detail specific offences or penalties related to breaches of the TCO provisions. The focus is primarily on the procedural correctness of the CEO's actions in processing TCO applications. The TCO itself does not impose any liabilities on any person and protects the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
The explanatory statement does not explicitly state penalties for non-compliance with the TCO provisions, but under general legal principles, failure to comply with statutory obligations could result in legal actions, fines, or other penalties as prescribed by law. Importers, however, are safeguarded against any disadvantage or liability under the TCO provisions for actions taken before the TCO's effective date.