EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111092
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 candles on 01 April 2011.
Instrument
TCO No 1111092 was made on 20 June 2011. It declares that those certain candles 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. 1111092 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. 1111092, enacted in 2011, is a legislative instrument under the Customs Act 1901, which facilitates the granting of tariff concessions to importers of specific goods by the Chief Executive Officer of Customs. This instrument addresses the need for a streamlined process to provide tariff relief on imported goods, ensuring that businesses can access necessary products at reduced duty rates, thereby promoting economic efficiency and competitiveness. The instrument was introduced to rectify any gaps in the existing tariff regime that might hinder the import of goods that are not domestically produced or are not readily substitutable by local products. The enactment of this instrument by the relevant authority aims to facilitate smoother trade operations and supports the broader policy objective of enhancing trade efficiency within Australia.
Scope and Application
The Tariff Concession Instrument No. 1111092 applies to goods subject to a Tariff Concession Order (TCO) made under the Customs Act 1901, specifically targeting the reduction of customs duties for certain imported goods. This Act applies to any entity or individual who imports goods eligible for a TCO, provided the goods do not fall under the specified exclusions outlined in section 269SJ of the Act, such as those that are produced in Australia. The geographic scope of this legislation is national, as it operates under the Commonwealth's authority, and it affects the entire customs duty regime across Australia. The legislation also extends its application through subordinate instruments, which allow for the detailed specification of goods eligible for tariff concessions and the conditions under which these concessions are granted. This mechanism ensures that the application of tariff concessions is flexible and can be adjusted as needed to meet changing economic conditions or trade agreements.
Key Provisions
The Tariff Concession Order No. 1111092, made under section 269F of the Customs Act 1901 (the Act), applies a free rate of duty to certain candles specified in the order. This rate is in contrast with the general rate of duty, which is 5% (s 269P(3)). This order was made on 20 June 2011 by the Chief Executive Officer of Customs (the CEO) after McPherson's Consumer Products applied for a tariff concession (s 269F). The CEO was satisfied that no substitutable goods were produced in Australia at the time the application was made, thus meeting the core criteria specified in section 269C of the Act.
The obligations imposed on the parties by this Act include the requirement for an application to be made by a person for a Tariff Concession Order (s 269F). The CEO must ensure that the application is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)). Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (s 269K(1)). This process was followed in the case of TCO No. 1111092, although no submissions were received in response to the invitation.
The Act does not specify any offences, penalties, or civil/criminal consequences for breach of the provisions related to Tariff Concession Orders. However, the rights of importers will be beneficially affected as they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (Regulations, para 126(1)(r)). The TCO does not impose any liabilities on any person. This ensures that the rights of a person (other than the Commonwealth) as at the date of registration are not disadvantaged or impose liabilities in respect of anything done or omitted to be done before the date of registration.