EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117570
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 glass platter sets on 02 June 2011.
Instrument
TCO No 1117570 was made on 22 August 2011. It declares that those certain glass platter 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. 1117570 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 Instrument No. 1117570 was enacted under the Customs Act 1901 to address the need for a lower rate of customs duty on certain goods that are not produced in Australia and for which there are no suitable substitutes. The instrument was introduced to facilitate trade by providing tariff concessions for specific goods, thereby reducing the financial burden on importers. This measure was enacted by the Chief Executive Officer of Customs, following an application from McPherson's Consumer Products Pty Ltd for a tariff concession order (TCO) concerning certain glass platter sets. The policy objective of this instrument is to encourage the importation of goods that are not locally produced, thus benefiting importers by reducing their customs duty obligations. The instrument came into force on the date the application was lodged, 2 June 2011, and does not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, under Part XVA, outlines a scheme where Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty to specific goods. The application process for a TCO involves the applicant meeting the core criteria, which requires that no substitutable goods are produced in Australia in the ordinary course of business. The CEO must ensure that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. If the CEO determines that the application meets the criteria, a TCO is issued, as evidenced by TCO No. 1117570 made for certain glass platter sets, setting their duty rate to free. The application of the TCO is effective from the date the application was lodged, providing benefits to importers who can now apply for duty refunds on imports made since that date. The Act ensures that the issuance of a TCO does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken prior to the TCO's registration.
Key Provisions
The Customs Act 1901, as amended, provides for the establishment of Tariff Concession Orders (TCOs) through Part XVA. Specifically, section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is deemed not to be in respect of goods specified in section 269SJ, the CEO must assess whether the application meets the core criteria outlined in section 269C. This criterion is satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they are required, under subsection 269P(3), to issue a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
In this case, McPherson's Consumer Products Pty Ltd applied for a TCO concerning certain glass platter sets on 2 June 2011. The CEO issued TCO No. 1117570 on 22 August 2011, declaring that these glass platter sets are subject to item 50 of Schedule 4 of the Tariff, with the general duty rate of 5% being reduced to free duty for the goods specified in the TCO. The CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should proceed. However, in this instance, no submissions were received. The TCO is deemed to have come into effect on the date the application was lodged, which in this case was 2 June 2011.
The TCO imposes certain obligations and requirements on the parties involved. The CEO must evaluate the application against the core criteria and, if satisfied, issue a written order. McPherson's Consumer Products Pty Ltd must ensure their application complies with the requirements of the Act, including demonstrating that no substitutable goods were produced in Australia. The CEO must also publish a notice in the Gazette, providing an opportunity for public input. The TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, ensuring that no person is disadvantaged or incurs liabilities for actions taken prior to the TCO's effective date.
Under the Customs Act 1901, breaches of the requirements set out in the TCO may result in both civil and criminal consequences. The maximum penalties for contravening the Act can include fines and imprisonment, although specific penalties are not detailed in this particular TCO. The Act also allows for the imposition of additional penalties by other relevant legislation. Importers can benefit from applying for a refund of duty on goods imported since the day the TCO came into force under paragraph 126(1)(r) of the Regulations, thereby ensuring compliance with the terms of the TCO.