EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132913
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 dog and/or cat restraints on 27 September 2011.
Instrument
TCO No 1132913 was made on 12 December 2011. It declares that those certain dog and/or cat restraints 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. 1132913 is taken to have come into force on 27 September 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 was enacted by the Commonwealth Parliament to regulate the importation of goods into Australia, including the imposition of customs duties on such goods. The Act provides a scheme for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs to grant tariff concessions to certain imported goods. These concessions are aimed at fostering fair trade practices and supporting specific industries by reducing the customs duty on certain goods, provided they are not substitutable by goods produced in Australia. The Customs Act 1901 was designed to address the need for a streamlined process to grant tariff concessions to importers, thereby enhancing the efficiency of customs administration and providing relief to certain sectors of the economy. The policy objective is to facilitate the importation of goods that are not produced domestically in a manner that corresponds to their intended use, thereby supporting economic activity and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 1132913, made under the Customs Act 1901, pertains to the application of tariff concessions for specific goods, in this case certain dog and/or cat restraints. The application of this instrument is directed at entities or individuals who import these particular goods, aiming to reduce the customs duty on them from the general rate of 5% to free. This instrument applies nationally across Australia, as it is a Commonwealth act. The scope of the instrument is limited to goods specified in the application, and it does not extend to any other goods not explicitly mentioned. The instrument does not affect any rights of third parties, except beneficially for importers who can claim a refund of duty on goods imported since the day the TCO is taken to have come into force. Any exclusions or exemptions are not explicitly stated in the provided text but would typically be detailed in the accompanying regulations or further legislative instruments. The instrument's application can be extended or clarified through subordinate instruments, which are not specified in this excerpt.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs, as outlined in section 269F. A TCO reduces the customs duty on specified goods, provided the application adheres to the core criteria set out in section 269C. Specifically, the application must demonstrate that, on the day it was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. Once the CEO is satisfied that these criteria are met, they are mandated to issue a written TCO, as per section 269P(3), which identifies the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
In the case of McPherson's Consumer Products, a TCO (No. 1132913) was issued on 12 December 2011 for certain dog and/or cat restraints, declaring them subject to a 5% duty rate as per item 50 of the Tariff Schedule 4. The TCO was made effective from 27 September 2011, the date of application, as stipulated in section 269S(1). The CEO, following the acceptance of the application, published a notice in the Gazette inviting submissions from any interested parties, though no objections were received, as per subsection 269K(1).
The TCO imposes certain obligations on the entities it governs, particularly the CEO of Customs, who must evaluate the application against the core criteria and issue the TCO if appropriate. The CEO must also ensure that the necessary public notice is published in the Gazette to allow for any objections. Additionally, importers who qualify under the TCO may apply for duty refunds on goods imported from the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not adversely affect the rights of any individual or entity as they stood prior to its issuance, nor does it impose any new liabilities on such parties.
Breaches of the requirements outlined in the Customs Act 1901 or the associated Regulations could lead to various civil or criminal consequences. For example, incorrect claims for tariff concessions or duty refunds could result in penalties under the Customs Act, including fines and potential imprisonment. The exact penalties depend on the severity of the breach, but they can be substantial, reflecting the seriousness of evading customs duties or misrepresenting information to the CEO of Customs. The specific penalties for breaches are not detailed in the explanatory statement but would be defined elsewhere in the Act or associated Regulations.