EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111093
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 1111093 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. 1111093 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 customs duties, including provisions for Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty on specified goods, provided that certain criteria are met. The introduction of TCOs addresses the need to support Australian industries by reducing import duties on goods that are not produced domestically, thus ensuring competitive pricing and fostering economic growth. The instrument in question, Tariff Concession Instrument No. 1111093, was made under the authority of the Customs Act 1901 to grant tariff concessions to McPherson's Consumer Products for certain kitchenware sets, effective from 1 April 2011. This instrument was introduced following an application by the company and subsequent satisfaction by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO.
Scope and Application
The Tariff Concession Instrument No. 1111093 under the Customs Act 1901 applies to goods specified in the instrument, namely certain kitchenware sets, which are declared to be subject to a reduced rate of customs duty. The application of this legislation is directed towards entities or individuals who are involved in the importation of these goods, thereby directly affecting the importers of the kitchenware sets. The Act operates within the national jurisdiction of Australia, and its provisions are enforced by the Chief Executive Officer of Customs. The Act provides for a mechanism whereby the CEO can make Tariff Concession Orders for goods under specific conditions, including the absence of substitutable goods being produced in Australia. The scope of the legislation is limited by exclusions outlined in section 269SJ, which specifies goods that cannot be subject to a TCO. The instrument itself does not impose any liabilities on any person other than the Commonwealth and does not disadvantage anyone who had rights as of the date of the instrument's registration. The commencement of the TCO is effective from the date the application was lodged, which in this case is 1 April 2011. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received.
Key Provisions
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs) that can be applied for by interested parties, as outlined in section 269F. The Chief Executive Officer of Customs (CEO) has the authority to grant these orders, which provide for reduced customs duty rates on specific goods, as detailed in section 269P(3). For McPherson's Consumer Products, this meant that their application for a TCO in respect of certain kitchenware sets on 01 April 2011 resulted in TCO No. 1111093 on 20 June 2011, which declared that these sets would be subject to a zero duty rate, previously at 5%, under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The CEO has several obligations under the Act when processing a TCO application. Firstly, the CEO must ensure that the application is not for goods that are prohibited by section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must then proceed to make the TCO. Additionally, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1) to allow for public submissions on the application, although in this case, no submissions were received.
Breaching the requirements of the Customs Act 1901 or the conditions of a TCO can result in significant consequences. Under the Act, any person found to have contravened the provisions of the Act, or any conditions imposed by a TCO, may be subject to penalties. Although the specific penalties are not detailed in the explanatory statement, they may include fines, imprisonment, or both, depending on the nature and severity of the breach. The Act provides for a robust legal framework to ensure compliance and the fair application of tariff concessions, protecting the interests of both the Commonwealth and the private sector.