EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117575
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 head-bands on 02 June 2011.
Instrument
TCO No 1117575 was made on 15 August 2011. It declares that those certain head-bands 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. 1117575 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 amended to include the ability to make Tariff Concession Orders (TCOs), which apply lower rates of customs duty to certain goods. The Tariff Concession Instrument No. 1117575 was enacted in 2011 to address the specific need for tariff concessions on certain headbands, as applied for by McPherson's Consumer Products Pty Ltd. This instrument was made under the authority of the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, including the absence of substitutable goods produced in Australia. The Tariff Concession Order No. 1117575 was made on 15 August 2011, declaring that the headbands in question are subject to a free rate of duty rather than the general rate of 5%. The instrument was published in the Gazette with an invitation for submissions, though none were received. The Tariff Concession Order is effective from 2 June 2011, the date the application was lodged, and does not disadvantage any person or impose liabilities for actions taken prior to its registration.
Scope and Application
The Tariff Concession Instrument No. 1117575, under the Customs Act 1901, applies to any entity seeking a tariff concession order (TCO) for goods that are not substitutable by Australian-made products and are not explicitly excluded by section 269SJ of the Act. The legislation facilitates lower customs duty rates on specified goods, provided that the applicant meets the core criteria outlined in sections 269C, 269D, 269E, and 269P of the Act. This legislation operates on a Commonwealth level, with the Chief Executive Officer of Customs having the authority to make TCOs under section 269F. The instrument in question, TCO No. 1117575, was issued on 15 August 2011 and came into effect on 2 June 2011, the date on which the application was lodged. Notably, the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before its registration, and it does not affect the rights of persons other than the Commonwealth. Importers of the specified goods will benefit from this concession, being eligible to apply for a refund of duty on goods imported from the effective date of the TCO.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs (CEO) (sections 269F and 269P(3)). An applicant can seek a TCO for goods if the CEO is satisfied that the goods are not specified in section 269SJ of the Act and that the application meets the core criteria outlined in section 269C. These criteria include ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (sections 269C, 269D, 269E). If the CEO is satisfied with the application, a written order, or TCO, is issued declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thus applying a lower rate of customs duty (section 269P(3)).
The obligations under the Act require the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In the case of TCO No. 1117575, the CEO did not receive any submissions in response to this invitation. The TCO is taken to have come into force on the day the application was lodged, which in this case was 02 June 2011 (subsection 269S(1)). The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration so as to disadvantage that person or impose any liabilities on a person in respect of anything done or omitted to be done before the date of registration. Importers 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.
There are no specified offences, penalties, or civil/criminal consequences for breach of the TCO provisions within the text provided. The focus of the legislation appears to be on the procedural requirements and the conditions under which TCOs can be issued, rather than on punitive measures for non-compliance with the Act itself. However, it should be noted that general compliance with customs laws, including adherence to the terms of any TCO, is crucial. Breaches of other provisions of the Customs Act 1901 may still attract penalties, as per the broader legislative framework governing customs regulations.