EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1121496
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 cookware on 30 June 2011.
Instrument
TCO No 1121496 was made on 12 September 2011. It declares that those certain cookware 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. 1121496 is taken to have come into force on 30 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise duties, and includes provisions for tariff concession orders (TCOs). These orders can reduce the customs duty on certain imported goods, provided specific criteria are met. The Tariff Concession Instrument No. 1121496, issued under this Act, aims to facilitate the importation of specific cookware by McPherson's Consumer Products, which will benefit from a duty-free rate as a result of the order. This was enacted following an application by the company, where the Chief Executive Officer of Customs determined that no suitable Australian-made alternatives existed. The objective of this TCO is to ensure that importers of the specified cookware can receive a refund for duties paid before the order's effective date, while not imposing any new liabilities on importers or other parties.
Scope and Application
The Tariff Concession Instrument No. 1121496, made under Part XVA of the Customs Act 1901, applies specifically to certain cookware that McPherson's Consumer Products applied for tariff concessions on, effective from 30 June 2011. This instrument is designed to provide relief from customs duty for goods that do not have substitutable alternatives produced in Australia. The application of this instrument is restricted to the particular cookware specified and does not extend to any other goods unless they meet the same criteria and are separately applied for and approved by the Chief Executive Officer of Customs. The instrument's geographic reach is determined by the Customs Act 1901, which is a Commonwealth Act, thus it applies nationally across Australia. There are specific exclusions, such as goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The application and scope of this instrument can be further extended or specified through subordinate instruments as provided by the Customs Act 1901 and related regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1121496 (section 269P(3)) require the Chief Executive Officer of Customs (CEO) to make a written order, or Tariff Concession Order (TCO), when satisfied that a TCO application meets the core criteria. This means that the CEO must issue a TCO if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also ensure that the application is not in respect of goods specified in section 269SJ of the Customs Act 1901, which are ineligible for a TCO. The TCO specifies a lower rate of customs duty for the goods in question, in this case, free duty on certain cookware as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, McPherson's Consumer Products, the applicant, must ensure that their application for a TCO is valid and meets the core criteria as outlined in sections 269C and 269SJ of the Act. This involves providing sufficient evidence that no substitutable goods were produced in Australia at the time of the application. The CEO, on the other hand, has the duty to assess the application promptly, consult if necessary, and make a decision on whether to issue a TCO based on the evidence provided. The CEO must also publish a notice in the Gazette inviting any person who might oppose the TCO to lodge a submission, as required by subsection 269K(1) of the Act.
Any breach of the requirements set out in the Customs Act 1901 may result in various civil or criminal consequences. For instance, if a person knowingly provides false or misleading information in an application for a TCO, they could be subject to civil penalties under section 283-5 of the Customs Act 1901, which can include fines up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, criminal penalties may apply for serious offences, with potential fines and imprisonment as prescribed under the relevant sections of the Act. The TCO itself does not impose any liabilities on any person, but it does affect the rights of importers, who can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.