EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1120785
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 wooden spoons on 24 June 2011.
Instrument
TCO No 1120785 was made on 12 September 2011. It declares that those certain wooden spoons 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. 1120785 is taken to have come into force on 24 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, enacted by the Australian Parliament, establishes a framework for imposing customs duties on imported goods. In response to the need for tariff flexibility and to support economic objectives, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs). The purpose of TCOs is to provide relief from customs duties for certain goods under specific circumstances, such as when no substitutable goods are produced in Australia. McPherson's Consumer Products applied for a TCO for certain wooden spoons, and after the Chief Executive Officer of Customs determined that the application met the core criteria, Tariff Concession Order No. 1120785 was issued on 12 September 2011. This order provides a duty-free concession on these wooden spoons, which generally attract a 5% duty rate. The instrument ensures that the rights of importers are positively affected and that no existing rights or liabilities are adversely impacted by the concession.
Scope and Application
The Customs Act 1901 applies to the regulation of imports and exports in Australia, including the imposition and concession of customs duties. Specifically, Tariff Concession Orders (TCOs) under Part XVA of the Act allow for reduced customs duties on certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The Act applies to individuals, businesses, and entities involved in the importation of goods. The geographic scope of the Act is national, encompassing all Australian jurisdictions. Exclusions under section 269SJ prevent certain goods from being subject to TCOs. Subordinate instruments, such as the Customs Tariff Act 1995, extend the application by specifying the goods eligible for tariff concessions. The CEO of Customs has the authority to make TCOs, which are subject to public consultation as outlined in section 269K(1) of the Act. TCO No. 1120785, which came into force on 24 June 2011, exemplifies this process, granting tariff concessions on certain wooden spoons based on the absence of substitutable goods produced in Australia.
Key Provisions
The Tariff Concession Instrument No. 1120785, pursuant to sections 269C and 269P of the Customs Act 1901, allows for a tariff concession order (TCO) that reduces the duty on certain wooden spoons. Specifically, under section 269P(3), the Chief Executive Officer (CEO) of Customs is required to issue a written TCO if satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, as per section 269C. This instrument declares that the wooden spoons are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby granting them a duty-free status.
The obligations imposed on the parties governed by this Act include the requirement for applicants, such as McPherson's Consumer Products, to demonstrate that the goods in question are not substitutable by Australian-made products. The CEO must verify this criterion and, if satisfied, issue the TCO. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received. The TCO does not affect pre-existing rights or impose new liabilities on any person other than the Commonwealth.
In terms of breaches and consequences, the Act does not explicitly outline specific offences or penalties for failing to comply with the TCO provisions. However, non-compliance with the terms of the TCO or the Customs Act itself could lead to broader legal ramifications, including potential civil or criminal penalties as stipulated in other sections of the Customs Act or related legislation. The Act ensures that the rights of importers are protected and that they may apply for a refund of duty on goods imported since the TCO's effective date, as outlined in the Regulations under paragraph 126(1)(r).