EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117574
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 kitchenware on 02 June 2011.
Instrument
TCO No 1117574 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. 1117574 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 by the Australian Parliament to establish a framework for the regulation of customs and excise. The Act was introduced to address the need for a systematic approach to managing the importation of goods into Australia, ensuring compliance with customs laws and facilitating trade. Part XVA of the Customs Act 1901 introduces a scheme whereby Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on specified goods. This scheme aims to support Australian industries by reducing the cost of imported goods that have no local alternatives. McPherson's Consumer Products applied for a TCO on certain kitchenware, which was granted on 15 August 2011, following a determination by the CEO that no substitutable goods were produced in Australia. The policy objective here is to provide relief to businesses by making certain imported goods duty-free, thereby promoting competitiveness and potentially stimulating local consumption of these goods.
Scope and Application
The Tariff Concession Instrument No. 1117574, issued under Part XVA of the Customs Act 1901, applies to the tariff concessions on specific goods, in this case, certain kitchenware, as determined by the Chief Executive Officer of Customs (CEO). The application of this instrument is limited to goods for which McPherson's Consumer Products applied on 02 June 2011. The CEO must ensure that these goods do not fall under the exclusions specified in section 269SJ of the Act, which lists goods that cannot be subject to a tariff concession order (TCO). If the CEO finds that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, and hence, the core criteria as outlined in sections 269C, 269B, and 269D of the Act are met, the CEO is required to issue a TCO. This instrument declares that the specified kitchenware are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby reducing the duty rate from 5% to free. The TCO is effective from the date the application was lodged and does not disadvantage any person by affecting their rights as at the date of registration or impose any liabilities on anyone in respect of actions taken prior to the registration date. The instrument further stipulates that importers of such goods can apply for a refund of duty under the relevant regulations.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to the Tariff Concession Order (TCO) No. 1117574 include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO is satisfied that the application is valid and meets the core criteria outlined in sections 269C, 269B, 269D, and 269E, they must make a written order declaring the goods subject to the TCO. Section 269P(3) further specifies that if the CEO determines the application meets these criteria, they must issue a TCO, as seen with TCO No. 1117574 for certain kitchenware, which was declared applicable to item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Customs Act 1901 on the parties governed by the TCO include the necessity for McPherson's Consumer Products to ensure their application for tariff concession meets the core criteria. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO has the obligation to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. In this instance, no objections were received, leading to the issuance of TCO No. 1117574. The Act also mandates that the TCO does not affect any pre-existing rights or impose any new liabilities on persons other than the Commonwealth, ensuring that the rights of importers are protected and potentially benefiting them through duty refunds.
Any breach of the requirements or obligations under the Customs Act 1901 could lead to significant consequences. While the explanatory statement does not specify particular offences or penalties, the Act generally provides for both civil and criminal penalties for non-compliance with customs regulations. Civil penalties can include fines, while criminal penalties can result in imprisonment, depending on the severity of the breach. In the context of TCOs, failure to adhere to the conditions set out by the CEO could result in the revocation of the TCO, leading to the reapplication of standard duty rates to the affected goods.