EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712510
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.
CCS Media Packaging applied for a TCO in respect of certain cd's and/or dvd's holders on 03 August 2007.
Instrument
TCO No 0712510 was made on 12 October 2007. It declares that those certain cd's and/or dvd's holders 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. 0712510 is taken to have come into force on 03 August 2007.
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 a framework for the imposition of customs duties and the regulation of imports and exports. One specific aspect of this Act is the establishment of a scheme for Tariff Concession Orders (TCOs) under Part XVA, allowing for the reduction or exemption of customs duty on certain goods. The problem this scheme addresses is the need to facilitate trade and protect domestic industries by providing tariff relief where appropriate, thereby ensuring that Australian businesses can remain competitive while also benefiting consumers through lower prices on imported goods. This particular legislation, known as Tariff Concession Instrument No. 0712510, was introduced to provide tariff concessions for certain CD and DVD holders, in response to an application by CCS Media Packaging on 3 August 2007. The policy objective is to ensure that goods for which no substitutable Australian-produced alternatives exist are afforded tariff relief, thereby supporting the relevant industry and potentially lowering costs for consumers.
Scope and Application
The Customs Act 1901, specifically through its Tariff Concession Orders (TCOs) under Part XVA, provides a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on imported goods, reducing the duty applied to such goods. This legislative mechanism is available to any person who applies for a TCO in relation to goods that are not explicitly excluded under section 269SJ of the Act. A TCO may be issued if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The scope of the legislation applies nationally, impacting the customs duty rates for specific goods, as seen in the case of CCS Media Packaging, which successfully applied for a TCO for certain CD and DVD holders. The CEO's decision to issue TCO No. 0712510 meant that these holders were subject to a duty rate of free, rather than the general 5% duty rate. The application of the TCO commences on the date the application is lodged, as specified in subsection 269S(1) of the Act, and does not retroactively affect any existing rights or liabilities incurred before the registration date.
Key Provisions
The Tariff Concession Instrument No. 0712510, pursuant to section 269F of the Customs Act 1901, facilitates the application for Tariff Concession Orders (TCOs) by allowing individuals or entities to apply to the Chief Executive Officer (CEO) of Customs for a lower rate of customs duty on certain goods. This process is contingent on meeting the core criteria outlined in section 269C, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied with the application, they are required to make a written order (TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying the reduced customs duty rate.
The obligations imposed by the Act on the parties involved are multi-faceted. The CEO must assess the validity of the application against the criteria in section 269C and, if satisfied, proceed to make the TCO. The applicant, on the other hand, must ensure that their application is comprehensive and meets the stipulated criteria to secure the tariff concession. Additionally, under subsection 269K(1), the CEO is mandated to publish a notice in the Gazette inviting any person who believes there are reasons against the TCO to lodge a submission. This transparency measure ensures that the decision-making process is inclusive and considers all relevant perspectives.
Should any party fail to comply with the requirements of the Customs Act 1901 or the terms of the TCO, there could be serious consequences. While the Explanatory Statement does not specify particular offences or penalties, breaches of customs legislation typically result in civil or criminal penalties. These may include fines, imprisonment, or both, depending on the severity and intent of the breach. The maximum penalties for breaches of customs laws can vary significantly, often aligning with the general provisions of the Customs Act 1901, which may include substantial financial penalties and imprisonment for serious or repeated offences.