EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127155
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 jugs on 11 August 2011.
Instrument
TCO No 1127155 was made on 02 November 2011. It declares that those certain jugs 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. 1127155 is taken to have come into force on 11 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. 1127155, enacted under the Customs Act 1901, was introduced to address the need for a mechanism allowing for tariff concessions on specific imported goods. This instrument was designed to facilitate the application process whereby the Chief Executive Officer of Customs can apply lower rates of customs duty on goods not produced in Australia and where there are no suitable substitutes. The legislation was enacted to streamline the process for businesses to apply for tariff concessions, ensuring that the application process is transparent and allows for public submissions, although in this case, none were received. The policy objective is to provide economic benefits by potentially lowering the cost of importing certain goods, thereby enhancing competitiveness and consumer choice.
The instrument was made on 2 November 2011, following an application by McPherson's Consumer Products for certain jugs. The application was deemed valid as no substitutable goods were produced in Australia, and thus, the Chief Executive Officer of Customs made the order, effective from 11 August 2011. This instrument ensures that the general duty rate of 5% is reduced to free for the specified goods, benefiting importers who can apply for duty refunds on imports since the commencement date of the order. The legislation ensures that the rights of all parties, excluding the Commonwealth, are preserved and not disadvantaged by the introduction of the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods for which an application has been made and approved by the CEO, provided the goods are not specified in section 269SJ of the Act and meet the core criteria outlined in section 269C. The Act applies to any person or entity that seeks a tariff concession for specific goods. The scope of the Act is national, applying across the Commonwealth of Australia. Notably, a TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, nor does it impose any liabilities on persons other than the Commonwealth for actions taken before the registration date. The Act may be extended or modified through subordinate instruments, such as regulations or further legislative amendments. The Explanatory Statement for Tariff Concession Instrument No. 1127155 illustrates this process by detailing the application of McPherson's Consumer Products for a TCO on certain jugs, which was approved and published in the Gazette.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1127155, under the Customs Act 1901, primarily concern the application and approval process for Tariff Concession Orders (TCOs) (sections 269F and 269P(3)). Specifically, section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO, and section 269P(3) mandates that the CEO must issue a written TCO if the application meets the core criteria. The core criteria, as outlined in section 269C, require that no substitutable goods are produced in Australia at the time the application is made. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions regarding the TCO application.
The obligations imposed by the Act on parties or entities include the requirement for McPherson's Consumer Products to ensure that their application for a TCO meets the core criteria, specifically that no substitutable goods are produced in Australia at the time of application (section 269C). The CEO is obligated to make a decision on the TCO application based on whether these criteria are met and to issue a written order if they are (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (section 269K(1)), although in this case, no submissions were received.
In terms of consequences for breach, the Customs Act 1901 does not explicitly state specific offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO. However, any misuse of a TCO or fraudulent claims for tariff concessions could potentially lead to civil or criminal penalties under other relevant sections of the Customs Act 1901 or other applicable legislation. For example, fraudulent claims could be subject to penalties under sections related to false statements or misleading and deceptive conduct. While the Act does not specify maximum penalties in this context, penalties for fraud or misrepresentation under the Customs Act 1901 can be substantial, including fines and imprisonment.