EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046967
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.
Mattel Pty Ltd applied for a TCO in respect of certain card game set on 20 October 2010.
Instrument
TCO No 1046967 was made on 12 January 2011. It declares that those certain card game set 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. 1046967 is taken to have come into force on 20 October 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, establishes a framework for the administration of customs and excise through the Australian Border Force. This Act was introduced to streamline the process of applying for tariff concessions on specific goods, ensuring that Australia's trade policies are fair and responsive to industry needs. Under this Act, the Chief Executive Officer of Customs is authorised to issue Tariff Concession Orders (TCOs), which provide lower rates of customs duty on certain goods when specific criteria are met. The Act aims to facilitate smoother trade by reducing the duty on goods that are not produced domestically, thus protecting local industries while promoting the import of necessary goods. The TCO process is designed to be transparent and inclusive, allowing public submissions on proposed concessions to ensure a balanced approach to trade policy.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This process is initiated when an entity or individual submits an application to the CEO for a TCO, subject to the conditions outlined in section 269F of the Act. For a TCO to be considered, the goods in question must not fall under the exclusions specified in section 269SJ, and the application must meet the core criteria stipulated in section 269C. These criteria include the absence of substitutable goods produced in Australia at the time of application, as defined in sections 269D and 269E. If the CEO determines that these conditions are met, a TCO is issued under section 269P(3), effectively reducing the duty rate on the specified goods as per the Customs Tariff Act 1995. The TCO mechanism ensures that the rights of importers are protected, and no existing liabilities or disadvantages are imposed on non-Commonwealth entities or individuals as a result of the TCO. This legislative framework is designed to facilitate trade by providing tariff relief on certain goods, subject to stringent criteria and public consultation processes.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to this Tariff Concession Order (TCO) include sections 269C, 269F, 269K, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, while section 269C outlines the core criteria that an application must meet. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods to which the TCO applies (section 269P(3)). Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this case.
The Act imposes certain obligations and requirements on the parties involved in the TCO process. The CEO must assess whether a TCO application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written TCO order. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties, although this requirement did not result in any submissions in this instance.
The Act does not explicitly detail offences, penalties, or consequences for breaches of the TCO provisions. However, the general legal framework of Australia applies, and any breaches of the Act or Regulations could result in civil or criminal penalties. The specific penalties would depend on the nature and severity of the breach, but they could include fines and other sanctions as determined by the relevant courts.
The Tariff Concession Order No. 1046967, made on 12 January 2011, declares that the card game sets are goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. This means that the general rate of duty on these goods, which is 5%, is reduced to free under this TCO. The order came into force on 20 October 2010, the day the application was lodged, and it does not affect the rights of any person as at the date of registration. Importers of such goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person.