EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1125800
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.
Baden P Morris applied for a TCO in respect of certain baby formula dispensers on 01 August 2011.
Instrument
TCO No 1125800 was made on 17 October 2011. It declares that those certain baby formula 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. 1125800 is taken to have come into force on 01 August 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 under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument was designed to address the issue of ensuring that tariff concessions are granted appropriately, particularly where goods are imported and there are no Australian-made equivalents. The explanatory statement for Tariff Concession Instrument No. 1125800, made under the Customs Act 1901, specifies that the instrument was created to facilitate tariff concessions for certain baby formula dispensers, reducing their duty rate to zero. This was achieved after an application by Baden P Morris, following the CEO's determination that no substitutable goods were produced in Australia, thereby meeting the core criteria stipulated in the Act. The policy objective here is to encourage importation of goods where no suitable domestic alternatives exist, potentially benefiting importers and consumers alike.
Scope and Application
The Tariff Concession Instrument No. 1125800 under the Customs Act 1901 applies to the application of tariff concessions on certain baby formula dispensers, as applied for by Baden P Morris on 1 August 2011. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on specified goods, provided the application meets the core criteria outlined in the Act. In this case, the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business, thus satisfying the core criteria. The TCO declares that the specified baby formula dispensers are to be treated as goods to which a particular item in Schedule 4 of the Customs Tariff Act 1995 applies, effectively making the duty on these goods free, down from the general rate of 5%. The TCO, which came into force on the date of application, does not affect any existing rights or impose liabilities on anyone other than the Commonwealth, and provides for potential duty refunds to importers for goods imported since the effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1125800 under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, they must determine whether the application meets the core criteria outlined in section 269C. This involves assessing whether no substitutable goods were produced in Australia on the date of the application, as defined by sections 269B and 269D. If the application meets these criteria, the CEO must issue a TCO under section 269P(3), which specifies the rate of duty applicable to the goods. In this case, TCO No. 1125800 was issued on 17 October 2011, declaring that certain baby formula dispensers would be subject to a zero duty rate instead of the general 5% duty rate.
The Act imposes several obligations and requirements on parties involved with TCOs. The CEO must ensure that any TCO application is assessed against the criteria set out in the Act, particularly sections 269C and 269SJ. The CEO also has a duty to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons to oppose the TCO, as stipulated in subsection 269K(1). In the instance of TCO No. 1125800, no submissions were received, and the CEO proceeded to issue the TCO. Additionally, section 269S(1) mandates that a TCO is effective from the date the application was lodged, meaning TCO No. 1125800 was effective from 1 August 2011.
The Act does not explicitly outline offences, penalties, or specific consequences for breaching its provisions in the context of TCOs. However, general compliance with the Customs Act 1901 is crucial. Any failure to adhere to the requirements or misrepresentation in an application could potentially lead to legal repercussions under other sections of the Customs Act or related legislation, such as administrative penalties for incorrect declarations or fraud. Moreover, any improper claims for duty refunds under the mistaken belief that a TCO applies could result in civil or criminal penalties for false statements or misrepresentation in customs documentation. It is essential for all parties to ensure they comply fully with the requirements and obligations set forth by the Customs Act 1901 to avoid any potential legal issues.