EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1120786
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 spoon stands and/or rests on 24 June 2011.
Instrument
TCO No 1120786 was made on 12 September 2011. It declares that those certain spoon stands and/or rests 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. 1120786 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 Parliament of Australia, provides for the imposition of customs duties on imported goods. To address specific economic or policy needs, the Act allows for the creation of Tariff Concession Orders (TCOs) that provide lower rates of duty for certain goods. The Tariff Concession Instrument No. 1120786 was introduced to provide tariff concessions for certain spoon stands and rests, reducing the customs duty on these items from 5% to free. This concession was granted after the Chief Executive Officer of Customs determined that no substitutable goods were being produced in Australia, meeting the criteria outlined in the Act. The policy objective behind this measure is to facilitate the importation of these goods without the burden of customs duty, potentially benefiting consumers and businesses that rely on these items.
Scope and Application
The Tariff Concession Instrument No. 1120786 under the Customs Act 1901 applies to the concession of customs duty for certain spoon stands and/or rests. The instrument applies to McPherson's Consumer Products who applied for a tariff concession order (TCO) for these goods. The Act allows the Chief Executive Officer of Customs to grant TCOs, which apply lower rates of customs duty to specified goods, provided certain criteria are met. The geographic reach of this legislation is national, as it applies throughout Australia. The Act specifies exclusions, such as goods listed in section 269SJ, which cannot be subject to a TCO. The TCO No. 1120786 came into force on 24 June 2011, the date the application was lodged, and applies from that date without affecting pre-existing rights or imposing new liabilities. The TCO provides a duty-free rate for the specified goods, replacing the general duty rate of 5%.
Key Provisions
The main sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are section 269C, which outlines the core criteria for a TCO application, and section 269F, which allows for the application to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C stipulates that for an application to meet the core criteria, there must be no substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged. Section 269F enables a person to apply to the CEO for a TCO concerning specific goods. If the CEO is satisfied that the application does not relate to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must assess whether the application meets the core criteria. If satisfied, the CEO must issue a written TCO, declaring that the goods are subject to a prescribed rate in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved in the TCO process. The CEO of Customs is obligated to assess TCO applications against the core criteria specified in section 269C. The CEO must ensure that no substitutable goods are produced in Australia before making a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. McPherson's Consumer Products, the applicant, must provide all necessary information and evidence to support the application and meet the criteria outlined in section 269C. The CEO must then decide whether the application meets these criteria.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. If a person makes a false statement or provides false information in an application for a TCO, they may be subject to civil or criminal penalties. Specifically, under section 273 of the Customs Act, making a false statement in connection with the Act can lead to a penalty of up to $11,100 or imprisonment for up to two years, or both. Additionally, if the CEO discovers that a TCO has been incorrectly applied, they may revoke the TCO and require any undue duty paid to be repaid. The Act does not specify any administrative penalties for breaches related to TCOs, but the consequences of providing false information can be severe.