EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137506
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 banners on 10 November 2011.
Instrument
TCO No 1137506 was made on 01 February 2012. It declares that those certain banners 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. 1137506 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 Parliament of Australia, establishes a framework for the regulation of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These TCOs are designed to provide relief by applying lower rates of customs duty to specific goods, thereby promoting trade and reducing costs for businesses importing these goods. The Tariff Concession Instrument No. 1137506, introduced in 2012, is an example of such an order. In this case, the instrument was made to address a specific application from McPherson's Consumer Products for tariff concessions on certain banners, ensuring that no substitutable goods were being produced in Australia at the time of application. The objective of the TCO is to facilitate the import of these goods at a reduced duty rate, enhancing the competitive position of businesses that rely on such imports.
Scope and Application
The Tariff Concession Instrument No. 1137506, made under the Customs Act 1901, applies to specific goods identified by McPherson's Consumer Products, namely certain banners. This legislation is relevant to entities and individuals involved in the importation of these goods, providing them with a lower rate of customs duty as specified in the instrument. The geographic reach of this Act is national, applying across Australia, as it operates under the Customs Act which is a Commonwealth Act. The application of this particular Tariff Concession Order (TCO) does not extend to goods specified in section 269SJ of the Customs Act, which cannot be subject to a TCO, ensuring that certain categories of goods remain exempt from tariff concessions. The instrument came into force on 10 November 2011, the day the application was lodged, and benefits importers by potentially allowing them to apply for a refund of duty on goods imported since this date. Notably, the TCO does not impose any new liabilities on any person and does not affect the rights of any person as at the date of registration in a manner that would disadvantage them.
Key Provisions
The primary operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO, which can result in a lower rate of customs duty for specific goods if certain criteria are met. Section 269C stipulates that a TCO application will meet the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO determines that an application meets the core criteria, section 269P mandates that the CEO must issue a written order (the TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S explains the effective date of a TCO, which is the day the application was lodged.
The Customs Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application not pertaining to goods specified in section 269SJ is assessed against the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the date of the application. Additionally, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth, as stated in section 269S(1).
Failure to comply with the provisions of the Customs Act can result in various consequences. While the Act does not explicitly state the penalties for non-compliance with TCO provisions, breaches of customs regulations generally can lead to significant civil and criminal penalties. For example, under the Customs Act, a person who knowingly makes a false or misleading statement to obtain a benefit can be liable for a penalty of up to 10,000 penalty units (as per section 242). Additionally, knowingly or recklessly contravening any provision of the Act can result in a penalty of up to 10,000 penalty units, or imprisonment for up to five years, or both, as outlined in section 243. These penalties underscore the importance of adhering to the requirements and obligations set forth in the Act.