EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137511
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.
McPhersons's Consumer Products applied for a TCO in respect of certain novelty glasses on 10 November 2011.
Instrument
TCO No 1137511 was made on 01 February 2012. It declares that those certain novelty glasses 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. 1137511 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 duties and provides mechanisms for tariff concessions to be granted under specific conditions. The Act was introduced to streamline the customs duty process and provide flexibility in addressing specific trade-related needs, ensuring that the Australian economy can benefit from competitive tariff rates. One such mechanism is the Tariff Concession Orders (TCO) scheme, which allows for reduced customs duty rates on certain goods, provided they meet specified criteria. The explanatory statement for Tariff Concession Instrument No. 1137511, issued on 1 February 2012, pertains to a concession for novelty glasses, reducing their duty rate from 5% to free, effective from 10 November 2011. This initiative was made to support domestic businesses by reducing the cost of importing these goods and thereby enhancing their competitiveness in the market.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application for Tariff Concession Orders (TCOs) which can lead to a reduced rate of customs duty on specific goods. This process involves an application being made to the Chief Executive Officer of Customs (CEO) who then determines whether the application meets the core criteria, notably whether substitutable goods are produced in Australia in the ordinary course of business. If these criteria are met, the CEO is required to issue a TCO, which then applies a specified lower rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995. The application and subsequent TCO apply nationally, affecting the rights of importers by potentially allowing them to seek a refund of duties on goods imported since the TCO's effective date. Notably, the TCO does not extend to disadvantaging or imposing liabilities on any person other than the Commonwealth for actions taken prior to the TCO's registration. This instrument is part of a broader legislative framework that may be further defined or expanded through subordinate instruments.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1137511 (referred to as TCO No. 1137511) under the Customs Act 1901 pertain to the process and requirements for making a Tariff Concession Order (TCO) and the criteria that must be met for such an order to be validly issued. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the CEO determines that the application is not for goods specified in section 269SJ of the Act, they must assess whether the application meets the core criteria, as outlined in section 269C. This criterion is satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied with the application, they must issue a written order (TCO) under section 269P(3) of the Act.
The Act imposes specific obligations and requirements on both the applicant and the CEO. For the applicant, the primary obligation is to ensure that their application is valid and meets the criteria set out in section 269C. This includes demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, on the other hand, is required to assess the application's validity, determine if it meets the core criteria, and, if satisfied, issue the TCO. Additionally, under section 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. In this case, the CEO did not receive any submissions in response to the published notice.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breaches of the Act or the TCO. However, the TCO does not impose any liabilities on any person and does not affect the rights of persons (other than the Commonwealth) as at the date of registration. Importers of the goods subject to the TCO may benefit from a refund of duty on goods imported since the day the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations. Essentially, the TCO is designed to provide tariff relief without imposing additional burdens or liabilities on individuals or entities.