EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1120788
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 paper towel dispensers on 24 June 2011.
Instrument
TCO No 1120788 was made on 12 September 2011. It declares that those certain paper towel dispensers 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. 1120788 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 Tariff Concession Instrument No. 1120788, enacted in 2011, addresses the need to facilitate the import of specific goods by providing tariff concessions, thereby reducing the customs duty on those goods. This instrument was introduced under the authority of the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to lower the duty on certain goods if specific criteria are met. The policy objective of this legislation is to ensure that importers are not disadvantaged and to potentially encourage the importation of goods that are not produced domestically, thereby benefiting consumers and the broader economy by providing access to competitively priced goods. The process involves the CEO of Customs evaluating applications against specified criteria and, if satisfied, issuing a TCO that applies a lower rate of duty to the specified goods.
Scope and Application
The Tariff Concession Instrument No. 1120788, made under the Customs Act 1901, applies to the goods specified in the instrument, which in this case are certain paper towel dispensers. This instrument is part of a broader scheme established under Part XVA of the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders are intended to provide lower rates of customs duty on specific goods, subject to certain conditions. The Act applies to any entity or person that imports the specified goods and benefits from the reduced duty rate once the TCO is in effect. Geographically, the application of this TCO is national, as it operates under the authority of the Commonwealth and impacts the importation of goods into Australia. The TCO does not apply to goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. Additionally, the TCO does not affect the rights of any person in respect of anything done or omitted to be done before the date of registration, ensuring that no existing rights are disadvantaged or liabilities imposed.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1120788 under the Customs Act 1901 (section 269P(3)) involve the Chief Executive Officer of Customs (CEO) making a written order declaring that certain paper towel dispensers are goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. This declaration was made on 12 September 2011, and it specifies that the general rate of duty on these goods is 5%, but under the Tariff Concession Order (TCO), the rate of duty is free.
The obligations and requirements imposed by the Act on the parties involved include the necessity for McPherson's Consumer Products to apply for a TCO if they believe the goods they are importing should qualify for a lower rate of customs duty. The CEO must then assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia at the time the application was lodged. If the CEO is satisfied that the application meets these criteria, they are required to make a TCO. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. In this case, no submissions were received.
Regarding potential consequences for breach, the Customs Act 1901 does not explicitly outline offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the registration date. Importers of the specified goods can apply for a refund of duty on goods imported since the TCO came into force, which is 24 June 2011. The Act ensures that the TCO does not impose any liabilities on any person, thereby maintaining the balance of rights and obligations under the legislative scheme.