EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127156
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 containers on 11 August 2011.
Instrument
TCO No 1127156 was made on 02 November 2011. It declares that those certain containers 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. 1127156 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the imposition of customs duties on imported goods. One of the mechanisms under this Act is the Tariff Concession Order (TCO) scheme, which allows for reduced customs duty rates on certain goods. This scheme aims to address economic and competitive issues by allowing for tariff concessions where appropriate, such as when no substitutable goods are produced in Australia. Instrument No. 1127156, made under the authority of this Act, grants a tariff concession to McPherson's Consumer Products for certain containers, reducing the duty rate from 5% to free. The policy objective here is to encourage the importation of these containers by removing a potential trade barrier, thereby benefiting importers and potentially aiding in the supply of these goods within the Australian market. The instrument was effective from the date of the application, 11 August 2011, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 1127156, established under the Customs Act 1901, pertains to the application of tariff concessions on certain goods, specifically containers, as applied by the Chief Executive Officer of Customs. This instrument applies to entities or individuals involved in the import of these specified containers, offering them a lower rate of customs duty compared to the standard rate. The application process involves an assessment by the CEO to ensure that the containers do not have substitutable goods produced in Australia, thereby meeting the core criteria for tariff concession. This legislative instrument operates on a national level, impacting the importation practices across Australia. It is important to note that the rights of existing parties are protected, and the concession does not retroactively impose liabilities on importers or other entities. The instrument is further supported by subordinate regulations, which detail the specific processes and conditions under which the tariff concessions are granted and managed.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1127156 (F2012L00188) under the Customs Act 1901 (the Act) provide for the granting of a Tariff Concession Order (TCO) that applies a lower rate of customs duty to certain containers. This instrument was made under section 269F of the Act, which allows the Chief Executive Officer of Customs (the CEO) to make a TCO for goods upon an application (section 269F). The CEO must decide if the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that these criteria are met, they must make a written order (a TCO) as per subsection 269P(3) (subsection 269P(3)).
The obligations imposed on parties by this Act include the requirement for McPherson’s Consumer Products to apply for a TCO for certain containers, ensuring that the application is made in compliance with the conditions set out in the Act (section 269F). The CEO has the obligation to review the application, determine if it meets the core criteria, and make a decision accordingly (section 269C). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO can proceed to make the TCO.
There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of the Act in the context of this particular TCO. However, the general provisions of the Customs Act 1901 would apply to any breaches of the Act, including potential civil and criminal penalties. The Act provides for a range of enforcement measures and penalties, which can include fines and imprisonment, depending on the nature and severity of the breach. It is important to note that the TCO itself does not impose any liabilities on any person other than the Commonwealth (subsection 269S(1)).
Overall, the Tariff Concession Instrument No. 1127156 provides a clear framework for the application and granting of tariff concessions, ensuring that the process is transparent and that any interested parties have the opportunity to provide input. The TCO benefits importers by reducing the customs duty on the specified containers, while the Act ensures that the process is managed efficiently and in accordance with the legislative requirements.