EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0410879
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.
Artique Designs Pty Ltd applied for a TCO in respect of certain parlour games on 18 October 2004.
Instrument
TCO No 0410879 was made on 4 January 2005. It declares that those certain parlour games are goods to which item 50A 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 0%.
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.0410879 is taken to have come into force on 18 October 2004.
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 Australian Parliament to regulate the import and export of goods and to collect customs duty. A particular focus of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows for the reduction or elimination of customs duty on certain goods. This was introduced to address the need for economic incentives to support industries that could not compete with locally produced goods. Tariff Concession Instrument No. 0410879, enacted in 2005, is an example of this mechanism in action, providing a zero-rate duty on specific parlour games as applied from the date of the application on 18 October 2004. The policy objective here is to encourage the importation of goods that are not produced domestically, thereby supporting market diversity and potentially lowering consumer prices.
Scope and Application
The Customs Act 1901, through Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can apply a lower rate of customs duty to goods specified in the order. An application for a TCO can be made by any person, provided the goods do not fall under the restricted categories specified in section 269SJ. If the CEO determines that the application meets the core criteria outlined in sections 269C, 269B, and 269D, they are obligated to issue a TCO. This process was applied to Artique Designs Pty Ltd's application for certain parlour games, resulting in TCO No. 0410879 which specifies a zero per cent duty rate for these games, effective from 18 October 2004. The application of the TCO is limited to the Commonwealth and does not disadvantage any person or impose new liabilities on anyone. Importers, however, stand to benefit from this concession as they can apply for a refund of duty on goods imported since the effective date.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F (1) provides that an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer (CEO) of Customs, while section 269C (1) outlines the core criteria that must be met for the CEO to consider granting the TCO. If the CEO is satisfied that the application meets these criteria, section 269P (3) mandates that a written order must be made declaring the goods to which the TCO applies.
The Customs Act 1901 imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure that their application is not for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. Additionally, the CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must then consider these submissions before making a decision. The CEO also has the responsibility to ensure that the core criteria are met before making a TCO.
Breach of the provisions within the Customs Act 1901 can lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of the Customs Act can generally result in civil or criminal penalties. Civil penalties can include fines, while criminal penalties can include imprisonment. For example, section 238 of the Customs Act outlines offences related to fraudulent importation or exportation of goods, with potential penalties including fines up to $220,000 or imprisonment for up to 10 years, or both, for individuals, and higher penalties for corporations. However, it is important to note that the specific penalties for breach of the TCO provisions would need to be referred to within the full text of the Act and associated regulations.