EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117555
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 Pty Ltd applied for a TCO in respect of certain kitchenware on 02 June 2011.
Instrument
TCO No 1117555 was made on 15 august 2011. It declares that those certain kitchenware 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. 1117555 is taken to have come into force on 02 June 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 Order No. 1117555 was introduced under Part XVA of the Customs Act 1901 to address the need for a streamlined process to grant tariff concessions on specific goods, thereby facilitating trade by reducing customs duties. The Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties, and this particular instrument was designed to offer relief on customs duties for certain goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders. The objective of this particular Tariff Concession Order, as stated, is to provide duty-free treatment for certain kitchenware imported by McPherson's Consumer Products Pty Ltd, effective from the date of the application, 02 June 2011. This was achieved without adversely affecting the rights of any person and without imposing any new liabilities, thereby maintaining fairness and equity in the application of the tariff concessions.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty to specified goods. This legislative framework applies to any person or entity wishing to import goods that may qualify for tariff concessions, provided the goods do not fall under the restricted list specified in section 269SJ. The scope of this Act is national, impacting the Commonwealth, states, territories, and all entities involved in the importation of goods subject to TCOs. For a TCO to be issued, the CEO must determine that no substitutable goods are produced in Australia in the ordinary course of business. Once a TCO is registered, it comes into force on the date the application was lodged, as per subsection 269S(1). The rights of importers are positively affected, enabling them to apply for duty refunds on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. Notably, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before its registration.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269P(3), and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, the CEO must make a written TCO. The TCO specifies the lower rate of customs duty that applies to the goods, as detailed in the Customs Tariff Act 1995. Section 269P(3) requires the CEO to publish the TCO in the Gazette, which marks its commencement. The TCO in this case, Instrument TCO No. 1117555, was made on 15 August 2011, declaring that certain kitchenware are subject to a free rate of duty instead of the general rate of 5%.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. The applicant, in this case McPherson's Consumer Products Pty Ltd, must ensure that their application for a TCO is valid and meets the criteria set out in the Act. The CEO is obligated to review the application, verify that it meets the core criteria, and make a written order if satisfied. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on the proposed TCO. In this instance, the CEO did not receive any submissions opposing the TCO. The TCO itself imposes no liabilities on any person, other than the Commonwealth, and does not affect the rights of any person as at the date of registration.
Breaching the requirements set out in the Customs Act 1901 can lead to various consequences. While the Act does not explicitly outline offences or penalties for non-compliance with the TCO provisions, general provisions of the Act may apply. For example, knowingly making a false statement in an application for a TCO could be considered an offence under section 250 of the Customs Act 1901, which carries a penalty of up to five years imprisonment or a fine of up to 5,000 penalty units, or both, for individuals. For corporations, the penalty can be up to 25,000 penalty units. Additionally, any person who contravenes a provision of the Customs Act 1901 may be liable to pay a civil penalty under section 284C of the Act, which can amount to up to 10,000 penalty units for individuals and 50,000 penalty units for corporations. These penalties are intended to ensure compliance with the Act and maintain the integrity of the customs duty system.