EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133084
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 Pty Ltd applied for a TCO in respect of certain plastic cake servers on 28 September 2011.
Instrument
TCO No 1133084 was made on 04 January 2012. It declares that those certain plastic cake servers 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. 1133084 is taken to have come into force on 28 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, as amended, provides a framework for the regulation of customs duties in Australia. Enacted by the Australian Parliament, this Act establishes the authority for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that allow for a lower rate of customs duty on specified goods. This mechanism was introduced to address the need for flexibility in tariff structures to support economic and trade policy objectives. Specifically, the Act aims to ensure that customs duties are levied in a manner that does not unfairly disadvantage Australian businesses or consumers, particularly in cases where domestic production of substitutable goods does not exist. This process is integral in maintaining a competitive edge for Australian industry and protecting consumer interests. McPherson's Consumer Products Pty Ltd applied for a TCO for certain plastic cake servers, which was subsequently granted, reflecting the Act’s intent to provide tariff relief where appropriate.
Scope and Application
The Tariff Concession Instrument No. 1133084, issued under the Customs Act 1901, applies specifically to certain plastic cake servers as identified by McPherson's Consumer Products Pty Ltd. The application for a Tariff Concession Order (TCO) was submitted on 28 September 2011, and the TCO was made on 4 January 2012, declaring that these goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. This means that the general customs duty rate of 5% is reduced to free for these specific goods, provided that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. The TCO operates nationally and is applicable to any entity or individual importing these goods into Australia, thereby directly affecting their customs duty obligations. The application process and the subsequent issuance of the TCO follow the statutory requirements set out in Part XVA of the Customs Act 1901, and the TCO does not retroactively affect any rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation, namely Tariff Concession Order (TCO) No 1133084, pertain to the Customs Act 1901 and the Customs Tariff Act 1995. Specifically, section 269F allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C outlines the core criteria that must be met for a TCO application to be considered, which includes the absence of substitutable goods produced in Australia on the day the application is lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written order declaring the goods to which a specified item of Schedule 4 to the Tariff applies. In this instance, the TCO No 1133084 applies to certain plastic cake servers, which are subject to item 50 of Schedule 4, with the general rate of duty being 5% and the duty for these goods under the TCO being free.
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person may apply to the CEO for a TCO if the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then assess whether the application meets the core criteria outlined in section 269C. Additionally, once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. The TCO is deemed to come into force on the date the application was lodged (subsection 269S(1)).
Breaching the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. Under section 269L of the Act, any person who knowingly or recklessly makes a false or misleading statement in an application for a TCO commits an offence and is liable to a penalty of up to 50 penalty units or imprisonment for up to 12 months, or both. Furthermore, under section 275 of the Act, any person who contravenes a provision of the Act or the Regulations may be liable to a penalty of up to 10,000 penalty units for a corporation and 5,000 penalty units for an individual, or imprisonment for up to five years, or both, depending on the severity of the breach. These penalties are intended to ensure compliance with the legislation and to protect the integrity of the tariff concession scheme.