EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133085
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 tableware and/or kitchenware on 28 September 2011.
Instrument
TCO No 1133085 was made on 04 January 2012. It declares that those certain tableware and/or kitchenware 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. 1133085 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, among other purposes. Specifically, Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO). This mechanism allows for a lower rate of customs duty to be applied to goods that are subject to a TCO. The objective of this legislative framework is to support domestic industries by providing tariff relief where no substitutable goods are produced in Australia. McPherson's Consumer Products sought a TCO for certain tableware and kitchenware, which was granted on 4 January 2012, as no substitutable goods were produced in Australia at the time of the application. This concession resulted in the affected goods being exempt from the general duty rate of 5%, thereby offering financial relief to importers of these items.
Scope and Application
The Tariff Concession Instrument No. 1133085 applies to the specific tableware and kitchenware as submitted by McPherson's Consumer Products, who sought and were granted a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. The instrument declares that the specified tableware and kitchenware are subject to the concession, thereby applying a free rate of duty instead of the general rate of 5%. This concession is contingent upon the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia, as outlined in section 269C of the Act. The application of the TCO is confined to the goods listed in the instrument and is effective from the date the application was lodged, 28 September 2011, as per subsection 269S(1) of the Act. The geographical reach of this legislation is federal, given it falls under the Customs Act 1901, which applies across the Commonwealth of Australia. The Act does not specify any exclusions or exemptions apart from those detailed in section 269SJ, which lists goods ineligible for TCOs. Any further refinement or extension of the application of this Act may be made through subordinate instruments, but this specific TCO does not impose any liabilities on any person and only benefits the rights of importers as per the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer (CEO) of Customs to create Tariff Concession Orders (TCOs) which reduce customs duty on particular goods. Section 269F of the Act permits an application for such a concession, provided the goods are not those specifically excluded by section 269SJ. An application must meet the core criteria set out in section 269C, which essentially requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The meanings of key terms like "goods produced in Australia", "ordinary course of business", and "substitutable goods" are further defined in sections 269D, 269E, and 269F respectively.
The obligations imposed by the Act on parties applying for a TCO are clear and structured. The applicant must ensure that the goods in question are not specified in section 269SJ and that the core criteria are met, particularly that no substitutable goods are produced in Australia at the time of the application. The CEO is obligated to evaluate the application against these criteria and, if satisfied, to make a written TCO specifying the reduced duty rate. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections, as mandated by section 269K(1) of the Act. In the case of McPherson's Consumer Products, the CEO made TCO No. 1133085 on 4 January 2012, after determining that the tableware and kitchenware met the core criteria and no substitutable goods were being produced in Australia.
Failure to comply with the provisions of the Customs Act 1901, particularly in relation to the submission of false information in an application or the misuse of a TCO, can result in significant consequences. While the explanatory statement does not detail specific offences or penalties within the text, the Act generally provides for various enforcement mechanisms, including fines and potential criminal charges for serious breaches. The penalties can vary based on the severity and intent behind the breach, with higher penalties reserved for more egregious violations. Additionally, the TCO itself does not affect any pre-existing rights or liabilities of parties other than the Commonwealth, as clarified by the commencement provisions in section 269S(1) of the Act.