EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1125805
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 kitchenware on 01 August 2011.
Instrument
TCO No 1125805 was made on 28 October 2011. It declares that those certain kitchenware 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. 1125805 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 Tariff Concession Instrument No. 1125805, enacted under the Customs Act 1901, addresses the need to facilitate tariff concessions for specific imported goods, ensuring they benefit from reduced customs duty rates. This instrument was introduced to streamline the process by which the Chief Executive Officer of Customs can grant tariff concessions to applicants, provided the goods do not have substitutable Australian-produced alternatives. The aim is to support economic efficiency and competitiveness by lowering import costs for certain goods, which aligns with the broader policy objective of enhancing trade and industry within Australia. The instrument came into force on the date the application was lodged, ensuring timely benefits for the applicants, in this case, McPherson's Consumer Products for their kitchenware imports.
Scope and Application
The Tariff Concession Instrument No. 1125805 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, namely kitchenware in this instance, to be imported into Australia. The application of the Act is triggered by an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. This concession applies nationally across Australia, governed by the Commonwealth. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order (TCO). The TCO does not retroactively affect the rights or impose liabilities on any person, except the Commonwealth, concerning actions taken before the TCO's effective date. Instead, it prospectively benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date. The Act may extend its application through subordinate instruments, such as regulations, which may further define terms and processes related to TCOs.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1125805 under the Customs Act 1901 (section 269F) establish the process by which a Tariff Concession Order (TCO) may be sought and granted. An applicant, such as McPherson's Consumer Products, may apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question are not excluded by section 269SJ of the Act. The CEO must then determine whether the application meets the core criteria outlined in sections 269B, 269C, 269D, and 269E. If satisfied, the CEO issues a written order declaring the goods subject to the TCO, specifying the applicable rate of duty (section 269P(3)).
The obligations imposed on the parties governed by this legislation are primarily administrative. McPherson's Consumer Products, as the applicant, must ensure that their application is made in accordance with the statutory requirements and provides all necessary information to satisfy the CEO that the core criteria are met. The CEO, on the other hand, is obligated to review the application, publish a notice inviting submissions from interested parties (section 269K(1)), and make a decision based on the information provided. The CEO's decision must be transparent and based on the evidence and criteria set out in the Act.
In terms of consequences for breach, the Customs Act 1901 does not explicitly detail offences or penalties for non-compliance with the TCO provisions. However, the Act does outline general provisions for offences under sections 227 to 247, which include fines and imprisonment for fraudulent activities, including the provision of false information in support of an application. The maximum penalties for these offences can be substantial, reflecting the seriousness of such breaches. Additionally, failure to adhere to the requirements of a TCO could result in the goods being subject to the standard rate of duty, potentially leading to financial liabilities for the importer.