EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603531
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.
Bluemouth Interactive Pty Ltd applied for a TCO in respect of certain interactive video game travel bags on 8 February 2006.
Instrument
TCO No 0603531 was made on 2 June 2006. It declares that those certain interactive video game travel bags 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. 0603531 is taken to have come into force on 8 February 2006.
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 facilitate the regulation of imports and exports and to collect duties and taxes on goods entering and leaving the country. One of the gaps identified in the Customs Act 1901 was the need for a mechanism to provide tariff concessions on certain goods to promote trade and industry. To address this, the Act was amended to include provisions for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs. TCOs allow for a lower rate of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative change aims to support Australian industries by reducing costs and enhancing competitiveness. The Tariff Concession Instrument No. 0603531, enacted in 2006, is an example of this mechanism in action, providing tariff concessions on interactive video game travel bags, thereby encouraging the importation of these goods at a reduced duty rate.
Scope and Application
The Tariff Concession Instrument No. 0603531 under the Customs Act 1901 applies to the specific interactive video game travel bags that were the subject of an application by Bluemouth Interactive Pty Ltd. The instrument provides for a tariff concession that lowers the customs duty on these goods from the general rate of 5% to a concessional rate of free, as long as the application meets the core criteria specified in the Act. This concession applies to any entity that imports these particular goods into Australia, provided they comply with the conditions outlined in the Tariff Concession Order. The geographical scope of this Act is national, as it pertains to customs regulations across Australia. The application of the Act is restricted to goods that do not fall under the categories specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The instrument itself does not impose any new liabilities on importers or other entities but rather adjusts the tariff on specified goods. The process for making such concessions includes a requirement for public notice and consultation, although in this instance, no submissions were received. The concession is effective from the date the application was lodged, which is 8 February 2006, and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0603531 under the Customs Act 1901 (sections 269C, 269F, and 269P) establish the framework for the creation of Tariff Concession Orders (TCOs). These sections require that an applicant may submit an application for a TCO to the Chief Executive Officer of Customs (CEO) if the goods in question are not listed in section 269SJ of the Act as ineligible for a TCO (section 269F). The CEO must then determine if the application meets the core criteria set out in section 269C, which involves assessing whether substitutable goods were produced in Australia on the date the application was lodged (section 269P(3)). If the application meets these criteria, the CEO is obligated to issue a TCO that specifies the goods and the applicable tariff concession from Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the CEO and applicants include the requirement for the CEO to make a written TCO if the application meets the core criteria and to publish a notice in the Gazette inviting submissions from interested parties. In this case, the CEO published the notice as soon as practicable after receiving the valid application from Bluemouth Interactive Pty Ltd for interactive video game travel bags, but no submissions were received. The TCO itself, once issued, takes effect from the date the application was lodged, thereby providing immediate tariff benefits to the applicant and any importers of the specified goods.
Failure to comply with the provisions of the Customs Act 1901 or the associated regulations may result in civil or criminal penalties. However, the specific details regarding offences and penalties are not outlined in the explanatory statement for Tariff Concession Instrument No. 0603531. Generally, under the Customs Act, breaches may lead to fines or imprisonment, but the exact penalties would depend on the nature and severity of the breach. The Act and associated regulations provide for a range of penalties, but the specifics are not detailed in this particular instrument.