EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836599
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.
Lego Australia Pty Ltd applied for a TCO in respect of certain plastic toy plates parts and or accessories on 23 October 2008.
Instrument
TCO No 0836599 was made on 16 January 2009. It declares that those certain plastic toy plates parts and or accessories 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. 0836599 is taken to have come into force on 23 October 2008.
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 to facilitate the regulation of customs duties and other charges in Australia. The 2009 Tariff Concession Instrument No. 0836599 addresses the specific issue of tariff concessions for goods that are not produced in Australia and for which there are no substitutable goods domestically available. This instrument was introduced to provide relief on customs duties for such goods, as outlined in the Customs Act 1901, and was made by the Chief Executive Officer of Customs under section 269F. The policy objective is to ensure that Australian consumers and businesses benefit from lower tariffs on imported goods that are not produced locally, thereby encouraging competition and reducing costs for consumers. The Tariff Concession Instrument No. 0836599 was made following an application by Lego Australia Pty Ltd for tariff concessions on certain plastic toy parts and accessories, and it came into force on the date the application was lodged, 23 October 2008.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) that reduce or eliminate customs duty on specified goods. The Act applies to individuals and entities, such as Lego Australia Pty Ltd, that seek to import goods into Australia and apply for a tariff concession. The application of a TCO is contingent upon the CEO determining that no substitutable goods are produced in Australia and that the application meets the core criteria outlined in the Act. This involves a thorough evaluation to ensure that the goods in question do not have Australian-made alternatives and are not those specified in section 269SJ, which are ineligible for tariff concessions. The Act's jurisdictional reach is national, as it operates under the Commonwealth's legislative authority, but the concessions apply specifically to the importation of goods into Australia. Any exclusions are strictly defined within the Act, particularly concerning the types of goods that cannot be subject to a TCO. The commencement of a TCO is effective from the date the application is lodged, and the TCO does not retroactively affect any transactions or liabilities incurred prior to its effective date, thereby protecting the rights of importers and other stakeholders.
Key Provisions
The main operative sections of this legislation (F2009L00609) include sections 269C, 269F, 269K, 269P, 269S, and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), provided the goods are not specified in section 269SJ. If the application meets the core criteria outlined in section 269C, the CEO must make a TCO. Section 269K mandates the CEO to publish a notice in the Gazette, inviting submissions from any interested parties. Section 269P details the process for making a TCO, while section 269S stipulates the commencement date of a TCO. Lastly, section 269SJ specifies the goods that cannot be subject to a TCO.
The Customs Act 1901 imposes several obligations on the parties involved. The CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ. If the application meets the core criteria, the CEO must make a written TCO and publish a notice in the Gazette, inviting submissions. The CEO must also ensure that the TCO does not affect the rights of any person adversely. Any person who considers that there are reasons why the TCO should not be made must have the opportunity to lodge a submission with the CEO.
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. Although specific offences and penalties are not detailed in the explanatory statement, general legal principles suggest that breaches of statutory requirements can lead to civil or criminal penalties. The maximum penalties will depend on the nature and severity of the breach. For instance, making false statements in an application could lead to criminal charges, while failure to comply with a TCO could result in civil penalties, such as fines or restitution. It is important to note that the specific penalties are not outlined in this legislation but would be determined under broader legal frameworks.