EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1025686
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.
Hot Shots Paintball Skirmish Pty Ltd applied for a TCO in respect of certain paintball protective goggles on 08 June 2010.
Instrument
TCO No 1025686 was made on 30 August 2010. It declares that those certain paintball protective goggles 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. 1025686 is taken to have come into force on 08 June 2010.
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, provides for the imposition of customs duties on imported goods. This Act includes mechanisms for the Chief Executive Officer of Customs to grant tariff concession orders (TCOs) for certain goods, allowing for a lower rate of customs duty under specific conditions. Tariff Concession Instrument No. 1025686, introduced under the Customs Act 1901, was established to address the need for tariff concessions on specific goods, such as certain paintball protective goggles, where no substitutable goods are produced in Australia. The objective of this instrument is to provide relief from customs duty on these goods, thereby potentially lowering costs for businesses and consumers and encouraging the importation of these specific items. The instrument was implemented on 8 June 2010, the date the application for the TCO was lodged, and it has been effective from that date.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of tariff concession orders (TCOs) to goods, effectively reducing the rate of customs duty for those specified under the order. Specifically, this legislation applies to individuals or entities that seek to import goods eligible for tariff concessions, provided these goods are not specified in section 269SJ as those ineligible for TCOs. The authority to create these orders lies with the Chief Executive Officer of Customs (CEO), who must ensure that the application aligns with the core criteria set out in section 269C. The scope of the Act is national, applying across Australia, as it pertains to the regulation and administration of customs duties and tariff concessions. The application of this Act is not restricted by state or territory boundaries but is governed by the overarching federal Customs Act 1901. There are no exclusions or exemptions specified in the text other than those mentioned in section 269SJ. The commencement of the TCO is effective from the date the application is lodged, and any rights of the parties involved, particularly importers, are protected as stipulated in the Act.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 1025686 under the Customs Act 1901 (the Act) allow for a lower rate of customs duty to be applied to certain paintball protective goggles (s 269F). This concession was granted by the Chief Executive Officer of Customs (the CEO) following an application by Hot Shots Paintball Skirmish Pty Ltd on 08 June 2010. The CEO was satisfied that no substitutable goods were produced in Australia at the time of the application, fulfilling the core criteria (s 269C). Consequently, the CEO made a written order (a TCO) on 30 August 2010, declaring that the goods in question are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free (s 269P(3)).
The obligations imposed by the Act on parties or entities governed by it include the requirement for an applicant to ensure their application for a Tariff Concession Order (TCO) is made in accordance with the Act, particularly under section 269F. The CEO must then assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia (s 269C). If the criteria are met, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties (s 269K(1)). The CEO is also required to make the TCO if the application is valid and no objections are received.
The Act stipulates certain consequences for non-compliance with its provisions. While the explanatory statement does not specify offences or penalties for breach of the TCO provisions, breaches of the Customs Act 1901 generally could result in significant civil or criminal penalties. For instance, under section 231 of the Act, penalties for making false or misleading statements can include fines of up to $22,000 or imprisonment for up to two years, or both, for individuals, and up to $110,000 for bodies corporate. Additionally, there could be further administrative consequences such as the seizure of goods or exclusion from the customs clearance process.
Overall, the Tariff Concession Instrument No. 1025686 under the Customs Act 1901 facilitates the granting of duty concessions for specific goods, provided the statutory criteria are met, and ensures the process is transparent and allows for public input.