EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608963
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.
Hasbro Australia Ltd applied for a TCO in respect of certain jigsaw puzzles on 24 May 2006.
Instrument
TCO No 0608963 was made on 4 August 2006. It declares that those certain jigsaw puzzles 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 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. 0608963 is taken to have come into force on 24 May 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, enacted by the Parliament of Australia, provides for the regulation of customs duties, including the imposition of tariff concession orders (TCOs) to reduce duty on specific goods. The Act aims to facilitate trade by potentially lowering the customs duty on certain goods, which can be particularly beneficial for importers. TCO No. 0608963, enacted in 2006, was made under this scheme to address the specific application by Hasbro Australia Ltd for tariff concessions on certain jigsaw puzzles. The core criteria for a TCO, as outlined in the Act, require that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. Following this criterion, the Chief Executive Officer of Customs determined that no such Australian-produced substitutes existed, thus approving the tariff concession and reducing the duty on these jigsaw puzzles from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0608963, under the Customs Act 1901, pertains to the application and implementation of Tariff Concession Orders (TCOs) for specific goods, namely certain jigsaw puzzles. This Act applies to any person who wishes to apply for a TCO, and it specifically concerns goods that are subject to the application. The scope of this legislation is directed towards the reduction or elimination of customs duty on certain imported goods, provided they meet the criteria outlined in the Act. The TCO applies on a national level across Australia, as it is a Commonwealth instrument. Importantly, the Act excludes certain goods from being eligible for a TCO, as specified in section 269SJ of the Customs Act 1901. Additionally, the application of the TCO is not retroactive; it only affects rights and liabilities from the date of registration, which, in this case, is 24 May 2006. The CEO must ensure that the application for a TCO meets the core criteria, particularly that no substitutable goods are produced in Australia, before making a decision. The CEO’s decision to grant a TCO is also subject to public consultation, although in this instance, no submissions were received.
Key Provisions
The main operative sections of this legislation involve the process for applying for a Tariff Concession Order (TCO) under the Customs Act 1901, the criteria for granting such an order, and the application of the order to specific goods. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods (s. 269F). If the application is not for goods specified in section 269SJ of the Act, the CEO must determine whether the application meets the core criteria (s. 269C). If satisfied, the CEO must make a written order declaring that the goods the subject of the application are subject to a prescribed rate of duty (s. 269P(3)). The Explanatory Statement provides an example of this process, detailing how Hasbro Australia Ltd applied for a TCO in respect of certain jigsaw puzzles on 24 May 2006, which was granted on 4 August 2006 (s. 269K(1)).
The obligations imposed by the Act on the parties involved include ensuring that the CEO is properly notified of any applications for a TCO, and that the CEO is satisfied the application meets the core criteria (s. 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (s. 269K(1)). The CEO is responsible for making the final decision on the TCO application and issuing the written order if the application meets the core criteria (s. 269P(3)).
The legislation also outlines the consequences of breach or non-compliance. The Explanatory Statement mentions that the rights of importers will be beneficially affected, and that they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (Reg. 126(1)(r)). However, the Explanatory Statement does not specify any penalties or sanctions for non-compliance with the Act or the TCO itself. The Act does not impose any liabilities on any person as a result of the TCO, but it is implicit that failure to comply with the terms of the TCO could lead to legal consequences, including potential fines or penalties as prescribed by other relevant legislation.