EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508513
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 30 June 2005.
Instrument
TCO No 0508513 was made on 16 September 2005. It declares that those certain parlour games 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. 0508513 is taken to have come into force on 30 June 2005.
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, addresses the need for a flexible scheme to apply tariff concessions on specific goods. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which can lower the rate of customs duty on certain goods. The Act was introduced to streamline the process of applying for and granting tariff concessions, ensuring that the application criteria are met before a concession is granted. The policy objective is to facilitate the import of goods that are not produced domestically, thereby encouraging trade and potentially lowering costs for consumers. The Tariff Concession Instrument No. 0508513, made on 16 September 2005, is an example of this process, where a TCO was issued for certain parlour games, reducing their customs duty rate from 5% to free.
Scope and Application
The Customs Act 1901, as amended, provides a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity that seeks to apply for a TCO in relation to goods that are not specified in section 269SJ of the Act. The Act applies across the Commonwealth of Australia, governing the process and criteria for issuing TCOs which reduce the rate of customs duty on certain imported goods. The Act mandates that a TCO application meets core criteria if, on the day of application, no substitutable goods are produced in Australia in the ordinary course of business. Exclusions include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, although the primary legislation itself does not detail these instruments. The rights and liabilities of persons, other than the Commonwealth, are not adversely affected by the issuance of a TCO, and importers may apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0508513 (F2005L02861) are found in sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specified goods. If the CEO is satisfied that the application meets the core criteria under section 269C, a TCO is issued, and a lower rate of customs duty applies to the goods in question. Section 269P(3) outlines that the CEO must issue a written order declaring that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, provided that no substitutable goods were produced in Australia on the day the application was lodged.
Under the Act, the CEO is required to assess applications for TCOs to ensure that they meet the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was made. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this instance, no submissions were received in response to the published notice.
The Act imposes certain obligations on the CEO in relation to TCOs, including the requirement to evaluate the application against the core criteria and to publish an invitation for submissions in the Gazette. If the CEO determines that the application meets the core criteria, a written TCO must be issued, and the lower rate of duty specified in the Tariff will apply to the goods. The CEO is also responsible for ensuring that the TCO does not impose any liabilities on any person in respect of actions taken prior to the TCO’s effective date.
Any failure to comply with the requirements of the Customs Act 1901 may result in various penalties or consequences. For instance, an incorrect or fraudulent application for a TCO could lead to criminal charges under the Crimes Act 1914, with potential penalties including fines and imprisonment. Additionally, any person who knowingly makes a false statement in an application for a TCO may be subject to civil penalties, including fines. The exact penalties depend on the nature and severity of the breach.