EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111098
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 nursing pads on 01 April 2011.
Instrument
TCO No 1111098 was made on 20 June 2011. It declares that those certain nursing pads 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. 1111098 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 Commonwealth Parliament, provides a framework for the administration of customs and excise in Australia. One of the provisions of the Act is Part XVA, which enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods. The primary problem this legislation addresses is the potential economic disadvantage faced by Australian businesses when importing goods that could be produced domestically, and the aim is to foster fair competition and support local industries. Tariff Concession Instrument No. 1111098 was introduced to provide a tariff concession for certain nursing pads, acknowledging that no substitutable goods were produced in Australia, thus ensuring that the application meets the core criteria as outlined in the Customs Act 1901. The instrument was made on 20 June 2011, and it is effective as of 1 April 2011, the date the application was lodged, with no adverse effects on the rights of persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1111098 under the Customs Act 1901 applies to goods for which an application has been made for a Tariff Concession Order (TCO). This legislation facilitates a reduction in the customs duty for specific goods, provided that no substitutable goods are produced in Australia. The application of this Act extends to any entity or person seeking a concession on the customs duty of particular goods, ensuring that the process is accessible and transparent. The scope of the Act includes the entire Commonwealth of Australia, and its application is managed by the Chief Executive Officer of Customs. Notably, the Act excludes certain goods from eligibility for a TCO, as specified in section 269SJ of the Customs Act 1901. The application of the Act may be further extended or refined through subordinate instruments, although this specific TCO does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any existing rights as at the date of registration.
Key Provisions
The Tariff Concession Instrument No. 1111098 under the Customs Act 1901 (section 269F) allows for the creation of Tariff Concession Orders (TCO) to apply lower customs duty rates to specific goods. McPherson's Consumer Products applied for a TCO for certain nursing pads on 1 April 2011. After reviewing the application, the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were being produced in Australia on the day the application was lodged, satisfying the core criteria set out in section 269C. Consequently, the CEO issued TCO No. 1111098 on 20 June 2011, declaring these nursing pads to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%.
Entities or individuals who wish to benefit from a TCO must ensure their applications meet the core criteria outlined in section 269C of the Customs Act 1901. This involves demonstrating that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then verify that the application does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. If the application is deemed valid, the CEO must issue a written order, as per section 269P(3), declaring the goods eligible for the concession. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or submissions. In this instance, no submissions were received in response to the notice.
Non-compliance with the requirements of the Customs Act 1901 may result in legal consequences. The Act does not explicitly outline specific offences or penalties for breach in the context of TCOs; however, general penalties under the Customs Act 1901 may apply. These can include fines, imprisonment, or both, depending on the severity and nature of the breach. For example, under section 221 of the Act, any person found guilty of an offence may be subject to a penalty of up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate, in addition to or in lieu of imprisonment for up to five years. It is imperative for entities and individuals to adhere to the provisions of the Act and any TCOs issued to avoid potential legal repercussions.