EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111094
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 barbecue sets on 01 April 2011.
Instrument
TCO No 1111094 was made on 20 June 2011. It declares that those certain barbecue 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. 1111094 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. 1111094, enacted in 2011 under the Customs Act 1901, aims to provide relief to certain importers by reducing customs duty rates on specified goods, in this case, barbecue sets, when no equivalent goods are produced in Australia. This instrument was introduced to address the gap in the tariff system where certain imported goods could benefit from lower duty rates if they are not domestically produced. The instrument was made by the Chief Executive Officer of Customs in accordance with the Act, ensuring that the core criteria for tariff concessions were met. The process involved publishing a notice in the Gazette to invite submissions, although none were received. The tariff concession order came into force on the date the application was lodged, effectively benefiting the rights of importers by potentially allowing them to claim refunds for duties paid on the specified goods since the effective date. This instrument underscores the policy objective of providing tariff concessions to promote fair trade practices and support the importation of goods not produced locally.
Scope and Application
The Tariff Concession Instrument No. 1111094 under the Customs Act 1901 applies to the specific case of McPherson's Consumer Products, who applied for tariff concession orders (TCO) in respect of certain barbecue sets. This instrument is applicable to the goods specified in the application and operates within the framework established by Part XVA of the Customs Act. The TCO, effective from 1 April 2011, provides for a concession in customs duty for the barbecue sets, reducing the duty from the general rate of 5% to free. This concession applies only to the specified goods and is contingent on the condition that no substitutable goods are produced in Australia at the time of the application. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any individual or entity. Additionally, the instrument extends its application through subordinate instruments as outlined in the Customs Tariff Act 1995.
Key Provisions
The key provisions of this legislation are found in sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not specified in section 269SJ. Section 269C mandates that the CEO must make a TCO if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) states that if the CEO is satisfied that the application meets the core criteria, a TCO must be made, which declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S(1) provides that a TCO is effective from the day the application for the TCO was lodged.
The Customs Act 1901 imposes several obligations on the CEO in relation to the processing of TCO applications. Firstly, the CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ. Secondly, the CEO must determine whether the application meets the core criteria, as defined by section 269C. Thirdly, if the CEO is satisfied that the application meets the core criteria, they must make a written TCO order under section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO.
Failure to comply with the provisions of the Customs Act 1901 may result in various penalties. However, the explanatory statement does not explicitly outline specific offences or penalties for breaches. The statement does note that the TCO does not affect the rights of a person as at the date of registration in a way that disadvantages that person or imposes liabilities in respect of anything done or omitted to be done before the date of registration. Importers of the goods subject to the TCO may apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
Overall, the Customs Act 1901 provides a framework for the application and approval of TCOs, which can result in tariff concessions for certain goods. The CEO has a responsibility to assess applications and make orders in accordance with the criteria set out in the Act. The explanatory statement does not detail specific penalties for non-compliance, but it is implied that any breaches of the Act may result in civil or criminal consequences as prescribed by the relevant legislation.