EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137497
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 paper towel holders on 10 November 2011.
Instrument
TCO No 1137497 was made on 01 February 2012. It declares that those certain paper towel holders 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. 1137497 is taken to have come into force on 10 November 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 for the regulation of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). These orders, as outlined in Part XVA of the Act, allow for lower rates of customs duty on certain goods, provided specific criteria are met. The Tariff Concession Instrument No. 1137497, issued in 2012, was designed to address the application by McPherson's Consumer Products for tariff concessions on certain paper towel holders, ensuring these goods benefit from a reduced duty rate of free, down from the general rate of 5%. The policy objective of these concessions is to support Australian businesses by making certain goods more competitively priced within the market. The Chief Executive Officer of Customs was satisfied that the application met the core criteria, specifically that no substitutable goods were produced in Australia at the time of the application. The instrument was made effective from the date the application was lodged, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 1137497, under the Customs Act 1901, applies to specific goods for which an applicant has successfully sought a Tariff Concession Order (TCO). The process involves an application to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. This application procedure is governed by sections 269C and 269F of the Act, with further definitions provided by sections 269D, 269E, and 269SJ. The instrument itself, TCO No. 1137497, was made on 1 February 2012, declaring certain paper towel holders to be subject to a free rate of duty, as no substitutable goods were produced in Australia. This order came into effect on the date the application was lodged, 10 November 2011, as per subsection 269S(1) of the Act. The TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date, without imposing any liabilities on any person under paragraph 126(1)(r) of the Regulations.
Key Provisions
The primary operative sections of this legislation are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) as per section 269P(3). Section 269C specifies that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Sections 269B, 269D, and 269E define terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Finally, section 269S sets the effective date of the TCO as the day the application was lodged.
The obligations and requirements imposed by this legislation on the parties it governs primarily concern the application and approval process for a TCO. The CEO must ensure that the application meets the core criteria as outlined in sections 269C and 269P(3). This includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must promptly make a written TCO. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties as per section 269K(1). If no submissions are received, the TCO can proceed without further objection.
The legislation does not explicitly detail specific offences or penalties for breaches of the TCO provisions. However, non-compliance with the terms of a TCO or any failure to adhere to the application process could potentially lead to legal challenges or administrative actions. The Tariff Concession Instrument No. 1137497 itself does not specify maximum penalties for breaches, but general provisions under the Customs Act 1901 may apply, including fines and imprisonment for serious breaches. Importers can also apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
The Tariff Concession Instrument No. 1137497 ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO. This includes ensuring that no liabilities are imposed on any person in respect of anything done or omitted to be done before the date of registration. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO's effective date. The TCO explicitly states that it does not impose any liabilities on any person.