EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117566
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 animal collars on 02 June 2011.
Instrument
TCO No 1117566 was made on 15 August 2011. It declares that those certain animal collars 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. 1117566 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 Customs Act 1901 was enacted to provide a comprehensive framework for the regulation of customs and excise duties in Australia. One of the key features of the Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which lower the rate of customs duty on certain goods, provided specific criteria are met. Enacted by the Australian Parliament, the Customs Act 1901 aims to streamline the customs process, ensuring that the application of duty is fair and reflects the economic realities of goods importation. The problem it addresses includes ensuring that duty is not imposed on goods for which no suitable Australian-produced alternatives exist, thus encouraging efficient trade practices and protecting domestic industries from undue competition.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Order No. 1117566, applies to entities and individuals involved in the importation of specific goods, namely certain animal collars, and the associated customs duty implications. The act governs the process by which these entities and individuals may apply for a Tariff Concession Order (TCO) to benefit from reduced or waived customs duties on specified goods, provided that no substitutable goods are produced in Australia. The TCO mechanism is intended to promote the importation of goods that are not domestically manufactured, thereby supporting industries that rely on imported inputs. This legislation operates on a national level, applying across Australia in accordance with the Commonwealth's legislative jurisdiction. The scope of the Act is not restricted by geographical limitations, affecting all importers and importers-to-be nationwide. However, the Act excludes certain goods from being subject to a TCO, as detailed in section 269SJ of the Customs Act 1901. The TCO itself does not impose any liabilities or disadvantage any person other than the Commonwealth, and it does not affect the rights of persons as at the date of the order.
Key Provisions
The main provisions of Tariff Concession Instrument No. 1117566, made under the Customs Act 1901, are detailed in sections 269C, 269F, and 269P(3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO is satisfied that the application is not in respect of goods prohibited under section 269SJ and meets the core criteria specified in section 269C, the CEO must make a written TCO. Section 269P(3) mandates that if the CEO is satisfied the application meets these criteria, the CEO must declare that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities it governs include the requirement for the CEO to ensure that the application for a TCO does not pertain to goods listed in section 269SJ. Additionally, under section 269C, the CEO must verify that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must also publish a notice in the Gazette, inviting any interested party to lodge a submission if they believe the TCO should not be made, as stipulated in section 269K(1). In the case of TCO No. 1117566, the CEO did not receive any submissions.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the text for breach of the Act. However, it is implied that if the CEO fails to properly assess and issue a TCO in accordance with the requirements set out in sections 269C and 269P(3), this could potentially lead to legal challenges or administrative consequences. The text does clarify that 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.