EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716467
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.
George Patterson Y & R Pty Limited applied for a TCO in respect of certain celebrity dolls on 27 September 2007.
Instrument
TCO No 0716467 was made on 07 December 2007. It declares that those certain celebrity dolls 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. 0716467 is taken to have come into force on 27 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, enacted by the Australian Parliament, established a framework within which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. These orders provide for reduced rates of customs duty on specified goods, subject to certain criteria. The primary gap addressed by the Act was the need for a structured process to grant tariff concessions on goods that are not produced domestically or are substitutable by locally-made products. The policy objective, as stated in the explanatory statement, is to benefit importers by potentially reducing their customs duty liabilities, while ensuring that no existing rights or liabilities of third parties are adversely affected. Tariff Concession Instrument No. 0716467, issued on 7 December 2007, is an example of such an order, applied to certain celebrity dolls, reducing their duty rate to free, from the general rate of 5%.
Scope and Application
The Customs Act 1901 applies to the process of granting Tariff Concession Orders (TCOs) for certain goods, allowing for reduced or waived customs duty on specified items. This legislation is particularly relevant to entities and individuals involved in the importation of goods that meet the criteria for tariff concessions. It encompasses the application process, the conditions under which a TCO can be granted, and the subsequent benefits available to importers. The Act operates at the national level, administered by the Chief Executive Officer of Customs, who has the authority to make TCOs in accordance with the provisions of the Customs Act and the Customs Tariff Act 1995. The scope of the Act is limited by exclusions outlined in section 269SJ, which specifies certain goods that cannot be subject to a TCO. The Act can be further extended or clarified through subordinate instruments, such as regulations that provide additional details on the application and processing of TCOs. The application process includes a public consultation period, inviting submissions from any interested parties, though in practice, no submissions were received for this particular TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0716467 under the Customs Act 1901 (section 269F) allow for the application of tariff concession orders (TCOs) by the Chief Executive Officer of Customs (CEO) for specific goods. If an application is made (section 269F), the CEO must decide if it meets the core criteria, specifically whether there are no substitutable goods produced in Australia (section 269C). If the application is approved, the CEO issues a written order (section 269P(3)) that declares the goods subject to a prescribed tariff item (section 269P(3)). In this case, TCO No. 0716467 (section 269P(3)) was issued for certain celebrity dolls, applying item 50 of Schedule 4 to the Tariff, resulting in a duty-free status for these goods.
The Act imposes several obligations on the parties involved. The applicant, George Patterson Y & R Pty Limited, must ensure that their application (section 269F) is valid and meets the criteria (section 269C). The CEO, upon receiving a valid application, must make a decision based on the criteria and issue a written order if applicable (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who may oppose the TCO. Although no submissions were received for TCO No. 0716467, the CEO's duty to provide this opportunity is mandated by the Act.
Failure to comply with the requirements of the Customs Act 1901 may lead to various civil and criminal consequences. While the explanatory statement does not detail specific penalties for breach, under general provisions of the Act, penalties for non-compliance can include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as outlined in the broader legislative framework of the Customs Act and any relevant regulations. However, the Act ensures that the rights of individuals and entities are not adversely affected by the issuance of a TCO, and any liabilities are avoided for actions taken before the TCO's effective date.