EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133103
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 juicers on 28 September 2011.
Instrument
TCO No 1133103 was made on 04 January 2012. It declares that those certain plastic juicers 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. 1133103 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 customs and excise duties, providing a framework for the administration of these taxes. One of the gaps addressed by the Act is the need for a mechanism to provide tariff concessions for certain imported goods, thereby facilitating trade and encouraging the import of goods that are not produced domestically. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet specified criteria, ensuring that such orders do not disadvantage producers in Australia. The Tariff Concession Instrument No. 1133103, introduced under this Act, aims to provide tariff relief for certain plastic juicers, recognising that no substitutable goods were produced in Australia at the time of the application, thereby promoting economic efficiency and consumer choice. This instrument was intended to have no adverse effect on the rights of any person other than the Commonwealth and to allow for potential duty refunds for importers.
Scope and Application
The Tariff Concession Instrument No. 1133103 applies to the specific goods, namely certain plastic juicers, as identified in the application submitted by McPherson's Consumer Products on 28 September 2011. This legislation is part of the broader framework provided under Part XVA of the Customs Act 1901, which governs the process for Tariff Concession Orders (TCOs). These TCOs allow for reduced customs duty rates on certain goods, provided that no substitutable goods are produced in Australia. The application for a TCO was made under the authority of the Chief Executive Officer of Customs, who is mandated to ensure that the application meets the criteria outlined in section 269C of the Act, including the absence of substitutable goods in Australia on the date of application. Once the CEO is satisfied with the application, a TCO is issued, which was the case for McPherson's Consumer Products, resulting in item 50 of Schedule 4 to the Customs Tariff Act 1995 being applied to their plastic juicers. The geographic reach of this legislation is national, as it pertains to the customs duties applied across Australia. The TCO does not extend to disadvantage any person or impose liabilities for actions taken before its registration date, thus safeguarding the rights of importers who can benefit from duty refunds for goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1133103, which is based on the Customs Act 1901, concern the application and processing of Tariff Concession Orders (TCOs) (s 269F). Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the application meets the core criteria, the CEO is required to make a written order that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (s 269P(3)). For McPherson's Consumer Products' application regarding certain plastic juicers, this resulted in TCO No. 1133103, which took effect on the date of the application, 28 September 2011 (s 269S(1)).
The Act imposes several obligations on the parties involved in the TCO process. The CEO must determine if the application meets the core criteria by ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Additionally, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their views (s 269K(1)). For the case of McPherson's Consumer Products, no submissions were received in response to this invitation.
The legislation also outlines specific consequences for non-compliance. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 or associated regulations could result in civil or criminal penalties. For instance, under the Customs Act, penalties for false statements or fraudulent conduct can include fines of up to $22,200 for individuals and significantly higher amounts for corporations, as well as potential imprisonment. Additionally, failure to comply with tariff concession orders could lead to the imposition of duties at the standard rate, rather than the concessional rate, potentially resulting in financial loss for the importer. The TCO itself does not impose any new liabilities on individuals or entities, but it does affect the rights of importers by enabling them to apply for a refund of duty on goods imported since the TCO came into force.