EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129227
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.
Napoleon Perdis Cosmetics Pty Ltd applied for a TCO in respect of certain make up cases on 26 August 2011.
Instrument
TCO No 1129227 was made on 14 November 2011. It declares that those certain make up cases 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. 1129227 is taken to have come into force on 26 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 Parliament of Australia, establishes a framework for the imposition of customs duties on imported goods. It also allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which provide for lower rates of customs duty on certain goods, provided specific criteria are met. The problem or gap this legislation addresses is the need for flexibility in customs duty rates to support specific economic or policy objectives, such as encouraging the importation of goods that are not produced domestically or to support particular industries. The Explanatory Statement for Tariff Concession Instrument No. 1129227, made under the Customs Act 1901, details the application and approval process for a TCO in respect of certain makeup cases by Napoleon Perdis Cosmetics Pty Ltd. The CEO was satisfied that no substitutable goods were produced in Australia, leading to the concession of a zero duty rate on these goods, which contrasts with the general rate of 5%. The policy objective appears to be facilitating the import of these specific goods without the burden of customs duty, potentially supporting industry growth or consumer access to certain products.
Scope and Application
The Tariff Concession Instrument No. 1129227, made under the Customs Act 1901, applies to entities that import specific makeup cases, allowing them to benefit from a concessional rate of customs duty. This legislation targets importers of goods that are subject to a Tariff Concession Order (TCO), and it applies from the date the application for the TCO was lodged, in this case, 26 August 2011. The geographic reach of this legislation is national, as it operates under the Commonwealth's authority, and it is specifically concerned with the importation of goods into Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which outlines goods that cannot be subject to a TCO. The application process involves satisfying the core criteria set out in section 269C of the Act, ensuring that no substitutable goods were produced in Australia at the time of the application. The instrument extends its application through subordinate instruments, including the Customs Tariff Act 1995, which specifies the applicable duty rates for goods subject to TCOs.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1129227 (TCO No. 1129227) under the Customs Act 1901 (sections 269C, 269F, 269K(1), 269P(3), and 269SJ) set out the criteria for the Chief Executive Officer of Customs (CEO) to assess and make a Tariff Concession Order (TCO). Section 269F allows a person to apply for a TCO in respect of goods, and section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the application, and section 269SJ outlines goods that cannot be subject to a TCO.
The obligations imposed by the Act on the parties governed by it include the requirement for the CEO to assess TCO applications against the core criteria (section 269C) and to publish a notice in the Gazette inviting submissions (section 269K(1)). If the CEO is satisfied that the application meets the core criteria, they must make a TCO (section 269P(3)). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on a person in respect of anything done or omitted before the date of registration (section 269S). The Act also places an obligation on applicants to ensure their applications meet the core criteria and to respond to any invitations for submissions.
The Act does not specify particular offences, penalties, or consequences for breach of the TCO provisions. However, it is implied that failure to comply with the core criteria for a TCO, or failure to follow the procedural requirements such as publishing notices in the Gazette, might result in the TCO not being made or being challenged in a court of law. The consequences of such challenges would depend on the specific legal context and could potentially include the TCO being revoked or deemed invalid.