EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133799
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 boxes on 06 October 2011.
Instrument
TCO No 1133799 was made on 04 January 2012. It declares that those certain boxes 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. 1133799 is taken to have come into force on 06 October 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, establishes a framework under which Tariff Concession Orders (TCOs) can be made to provide tariff concessions on certain imported goods. This legislative framework was introduced to address the gap in providing tariff relief to importers of goods where substitutable products are not produced domestically, thereby encouraging competition and reducing costs for consumers. Specifically, the Act enables the Chief Executive Officer of Customs to grant concessions when it is determined that no equivalent goods are produced in Australia. Tariff Concession Instrument No. 1133799, issued under this authority, aims to provide a tariff concession for certain boxes, setting their duty rate to free, as no substitutable goods were produced in Australia at the time of the application. This instrument, effective from the date of application, does not retroactively affect the rights of any party and provides a mechanism for importers to seek duty refunds for goods imported since the effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on certain goods. The application of this legislation applies to individuals or entities seeking to import goods into Australia, provided the goods in question are not specified as excluded in section 269SJ of the Act. The scope extends to any goods that are not substitutable by goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. The process involves an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria before issuing a TCO. The geographic reach of this legislation is national, as it applies to all customs operations within Australia. TCOs do not disadvantage any existing rights of persons other than the Commonwealth and do not impose any liabilities on such persons. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO was taken to have come into force.
Key Provisions
The main operative sections of this legislation, particularly sections 269C, 269F, and 269P, outline the process and criteria for the creation of a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding specific goods, provided these goods do not fall under the prohibited category outlined in section 269SJ. If the CEO determines that the application meets the core criteria specified in section 269C, which includes the absence of substitutable goods produced in Australia as per section 269D, the CEO is required to issue a written TCO. Section 269P(3) further stipulates that such an order must specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations and requirements imposed by this Act on the parties involved are quite specific. The CEO of Customs must rigorously assess each application against the criteria outlined in section 269C to ensure that no substitutable goods are produced in Australia at the time of application. Upon satisfying these criteria, the CEO must promptly publish a notice in the Gazette inviting any interested parties to lodge submissions against the proposed TCO. If no submissions are received, the CEO proceeds to issue the TCO. Additionally, McPherson's Consumer Products Pty Ltd, as the applicant, must provide sufficient evidence and justification for their application to meet the criteria, ensuring that the goods in question are eligible for the tariff concession.
Breaches of the provisions outlined in the Customs Act 1901 can result in significant consequences. While the explanatory statement does not explicitly detail specific offences or penalties, it is implied that non-compliance with the requirements to provide accurate information or meet the core criteria for a TCO could lead to the refusal of the application. Additionally, any misuse of the tariff concession could result in legal action. Although the statement does not specify maximum penalties, penalties for such breaches could include fines or other sanctions as prescribed under relevant sections of the Customs Act 1901 or associated regulations.
In summary, the legislation imposes clear procedural requirements on the CEO of Customs and the applicant for a TCO, with the overarching goal of ensuring that tariff concessions are granted fairly and in accordance with the stipulated criteria. The legal framework also implicitly warns against non-compliance, which could attract legal or financial penalties.