EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133086
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 plastic salad servers on 28 September 2011.
Instrument
TCO No 1133086 was made on 04 January 2012. It declares that those certain plastic salad 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. 1133086 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, enacted by the Australian Parliament, serves to regulate customs and excise through a comprehensive framework, including provisions for tariff concession orders. One such provision is the ability for the Chief Executive Officer of Customs to grant tariff concession orders to reduce customs duty on certain goods. This legislative instrument, F2012L00534, was introduced to address the need for more flexible tariff structures that could benefit industries by lowering import costs on specific goods. The objective, as outlined in the explanatory statement, is to provide a tariff concession for certain plastic salad servers, recognising that no substitutable goods were produced in Australia. This instrument ensures that the rights of persons other than the Commonwealth are not adversely affected by the tariff concessions, while allowing importers to benefit from duty refunds for goods imported from the date the order came into effect.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which can be issued by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specified goods. This legislation applies to entities or individuals who seek to import goods and wish to benefit from reduced customs duty rates, provided the goods are not listed in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The CEO assesses applications based on the core criteria, particularly whether substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. If an application meets these criteria, the CEO issues a TCO under section 269P, applying a prescribed tariff rate from Schedule 4 of the Customs Tariff Act 1995. The process also mandates the CEO to publish a notice in the Gazette inviting any interested parties to submit objections, although in the case of TCO No. 1133086, no objections were received. This TCO came into force on the date of application, 28 September 2011, and benefits importers by potentially allowing them to apply for a refund of duty on the specified goods imported since the effective date of the TCO, without imposing additional liabilities on any party.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (s 269F). An application for a TCO can be made by any person, subject to the goods not being those specified in section 269SJ (s 269F). If the CEO is satisfied that the application is valid, they must determine if it meets the core criteria outlined in section 269C, which require that on the date of application, no substitutable goods are produced in Australia in the ordinary course of business (s 269C). The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively.
The obligations imposed on the parties by the Act require McPherson's Consumer Products, or any applicant, to submit a valid application for a TCO, ensuring it meets the core criteria specified in section 269C. The CEO is obligated to assess the application, publish a notice in the Gazette inviting submissions from interested parties, and decide whether to issue a TCO based on the criteria in section 269C. Once a TCO is issued, the CEO must make a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (s 269P(3)).
In the event of a breach of the conditions specified in a TCO, or any related regulations, the Act does not explicitly outline specific offences, penalties, or consequences. However, general provisions within the Customs Act 1901 and related legislation may apply, including potential civil and criminal penalties for non-compliance. These may include fines and imprisonment for serious breaches, depending on the nature and severity of the infraction. The exact penalties would be determined by the relevant courts based on the specific circumstances of the breach.