EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114756
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 fixtures on 11 May 2011.
Instrument
TCO No 1114756 was made on 25 July 2011. It declares that those certain fixtures 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. 1114756 is taken to have come into force on 11 May 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, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specific goods. This mechanism was introduced to address the gap in facilitating the import of goods that are not produced in Australia, thereby encouraging trade and supporting industries that rely on imported components or materials. The Tariff Concession Instrument No. 1114756, made on 25 July 2011, is an example of such an order. In this instance, McPherson's Consumer Products applied for a TCO for certain fixtures, and the CEO determined that no substitutable goods were produced in Australia. Consequently, the TCO was issued, making the rate of duty on these goods free, as opposed to the general rate of 5%. This instrument aims to ensure that the rights of importers are beneficially affected and that no liabilities are imposed on any person as a result of the TCO, except for the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allows for reduced rates of customs duty on specified goods. This instrument applies to any person or entity that meets the core criteria set out in section 269C of the Act, specifically when no substitutable goods are produced in Australia in the ordinary course of business. The scope of this legislation is broad, covering any goods for which a TCO application is made and approved, thereby affecting the duty rates applicable to those goods. The geographic reach of this Act is national, as it applies throughout Australia and is administered under Commonwealth law. Any exclusions or limitations are outlined in section 269SJ, which specifies goods that cannot be subject to a TCO. The Act also allows for the extension of its application through subordinate instruments, which may provide further detail on specific goods or industries affected by the TCOs. This particular TCO, No. 1114756, was issued to McPherson's Consumer Products concerning certain fixtures and took effect from the date of application, 11 May 2011.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1114756 are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C defines the core criteria that must be met for a Tariff Concession Order (TCO) to be made, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P outlines the process by which the Chief Executive Officer of Customs (CEO) must make a written order if the application meets the core criteria. Section 269S explains the commencement date of the TCO, which is taken to be the day on which the application for the TCO was lodged.
The obligations imposed on the parties governed by this Act include the requirement for McPherson's Consumer Products to apply for a TCO under section 269F if they wish to benefit from reduced customs duty rates. The CEO is obligated to assess the application against the core criteria specified in section 269C. If satisfied, the CEO must make a written order as per section 269P. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as per section 269K.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly outline specific offences or penalties for breaches related to the issuance of a TCO. However, failure to comply with the provisions of the Act, including providing false or misleading information in a TCO application, could potentially result in legal action under general provisions for deceit or misrepresentation. The Act also ensures that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO was registered, as per section 269S(1). Importers, however, can benefit from the TCO by applying for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.