EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617440
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.
Tabcorp Holding Ltd applied for a TCO in respect of certain kiosks on 20 September 2006.
Instrument
TCO No 0617440 was made on 22 February 2007. It declares that those certain kiosks 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. 0617440 is taken to have come into force on 20 September 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 Australian Parliament, facilitates the reduction of customs duty on specific goods through Tariff Concession Orders (TCOs). This legislative framework was introduced to address the gap in providing tariff relief for goods that are not produced domestically or for which there are no suitable substitutes. The Customs Act allows the Chief Executive Officer of Customs to grant TCOs to eligible applicants, reducing the duty rate for the specified goods. The primary policy objective is to support Australian industries by reducing the cost of imported goods where local production or substitution is not feasible. The Tariff Concession Instrument No. 0617440, issued in 2007, is an example of this mechanism in action, providing a zero percent duty rate for certain kiosks, benefiting importers and aligning with the broader policy of tariff relief under the Customs Act.
Scope and Application
The Tariff Concession Instrument No. 0617440 under the Customs Act 1901 applies to specific goods in respect of which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs (CEO). This Act enables a reduction in the customs duty rate for certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of the TCO is targeted at entities and individuals who import the specified goods, thus directly affecting their customs obligations and potentially benefiting their financial outlay through reduced duty rates. The geographic scope of this legislation is national, as it operates under the Commonwealth's customs authority. Any exclusions from the application of a TCO are detailed in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The instrument itself extends the application of the TCO through its specific declaration regarding the affected goods and the applicable duty rate, which is zero percent as opposed to the general rate of five percent.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0617440 (the Instrument) under the Customs Act 1901 (the Act) concern the creation and application of Tariff Concession Orders (TCOs) for specific goods. Section 269F allows for the application to the Chief Executive Officer of Customs (the CEO) for a TCO for goods not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a TCO (section 269P(3)). The Instrument itself, TCO No. 0617440, specifies that certain kiosks are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a reduced duty rate of 0% from the general rate of 5%.
The Act imposes several obligations on parties involved in the TCO process. The CEO must decide whether an application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia (section 269C). Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be made, although in this case, no such submissions were received. The TCO, once made, is effective from the date the application was lodged (subsection 269S(1)), and it benefits importers by allowing them to apply for a refund of duty on goods imported since that date (paragraph 126(1)(r) of the Regulations).
The Act also outlines the consequences of non-compliance or breaches related to the TCO process. While the specific Instrument does not detail offences or penalties, breaches of the Customs Act generally can lead to civil and criminal consequences. For instance, failing to comply with the Act or the regulations can result in fines and, in severe cases, imprisonment. The maximum penalties can vary significantly depending on the nature and severity of the breach, but they are prescribed under the Customs Act and related regulations. It is important to note that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date.