EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715089
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.
University Games applied for a TCO in respect of certain football game tables on 17 September 2007.
Instrument
TCO No 0715089 was made on 23 November 2007. It declares that those certain football game tables 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. 0715089 is taken to have come into force on 17 September 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, including the imposition of customs duty. Part XVA of the Act, in particular, facilitates the granting of tariff concession orders (TCOs) by the Chief Executive Officer of Customs, which can reduce or eliminate customs duty on specified goods if certain criteria are met. The problem or gap that the Tariff Concession Instrument No. 0715089 seeks to address is the provision of a lower rate of customs duty on specific goods that are not substitutable by goods produced in Australia. The policy objective, as stated in the explanatory statement, is to support the Australian industry by ensuring that imported goods do not compete unfairly with locally produced goods. This is achieved by ensuring that tariff concessions are granted only when there are no suitable Australian-made alternatives. The instrument was made under the authority of the Customs Act 1901 and came into force on the date the relevant application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0715089 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), specifically certain football game tables in this instance, and is administered by the Chief Executive Officer of Customs (CEO). The Act allows for the application of a lower rate of customs duty to goods that are subject to a TCO, provided the application meets specific core criteria, such as the absence of substitutable goods produced in Australia. The instrument's jurisdiction is national, operating under the authority of the Commonwealth of Australia, and it extends its application to any goods that qualify under the specified conditions of the Act. The CEO's decision to grant a TCO is subject to consultation as per the Act, although in this case, no submissions were received. The TCO's commencement date aligns with the application date, ensuring that the benefits of the concession apply retroactively from that date. Importantly, the TCO does not adversely affect the rights of any person as of the registration date, nor does it impose any liabilities on individuals for actions taken prior to the registration.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0715089 under the Customs Act 1901 (section 269C and 269P(3)) establish the criteria for granting a Tariff Concession Order (TCO) and the procedure for its issuance. When an application is submitted under section 269F, the Chief Executive Officer of Customs (CEO) must determine if the application meets the core criteria specified in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets the criteria, they must issue a written TCO as per section 269P(3), specifying the lower rate of duty for the goods. In this case, the CEO issued TCO No. 0715089 on 23 November 2007, which applied a free duty rate to certain football game tables, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the parties governed by this Act include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)). This notice must invite any interested parties to submit any reasons why the TCO should not be made. Additionally, the TCO itself, once issued, does not affect the rights of any person (other than the Commonwealth) as they existed on the date of registration, nor does it impose any liabilities on any person for actions taken prior to the registration date. This ensures that the TCO operates prospectively and does not disadvantage any existing stakeholders.
Failure to comply with the requirements set forth in the Customs Act 1901 may result in various civil or criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can attract significant penalties under the Customs Act and other related legislation. These may include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant case law or additional statutory provisions. The Act does not specify maximum penalties in this context, but general penalties for customs-related offences can be substantial.