EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052582
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.
Kmart Australia Ltd applied for a TCO in respect of certain tethered spinning ball game sets on 01 December 2010.
Instrument
TCO No 1052582 was made on 28 February 2011. It declares that those certain tethered spinning ball game sets 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. 1052582 is taken to have come into force on 01 December 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 a framework for the administration of customs and excise duties. The Act was introduced to address the need for a comprehensive regulatory scheme governing the import and export of goods, including the imposition and collection of customs duties. One of the key provisions of the Act is the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, facilitating tariff concessions for certain goods. This legislative framework aims to ensure that the administration of customs duties is efficient and equitable, and that the rights of importers are protected. The introduction of TCOs addresses specific economic and trade policy objectives, such as enhancing competitiveness and facilitating trade by reducing the duty on certain goods.
Scope and Application
The Tariff Concession Instrument No. 1052582, established under Part XVA of the Customs Act 1901, applies to entities such as Kmart Australia Ltd that wish to seek tariff concessions for specific goods, in this case, certain tethered spinning ball game sets. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) which provide for a lower rate of customs duty on the goods specified in the order. The scope of this legislation is national, operating within the framework of the Commonwealth of Australia. The application process for a TCO requires the CEO to assess whether the goods in question are substitutable by any goods already produced in Australia in the ordinary course of business. If the CEO determines that no such substitutable goods are produced domestically, a TCO can be issued. The TCO applies retroactively from the date the application was lodged, meaning that in this instance, it is effective from 1 December 2010. Importantly, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. It specifically benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1052582 under the Customs Act 1901 (section 269F) outline the process for applying for a Tariff Concession Order (TCO), which allows for a lower rate of customs duty on certain goods. The Chief Executive Officer of Customs (CEO) must be satisfied that the goods in question do not have substitutable goods produced in Australia in the ordinary course of business (section 269C). If the application meets these core criteria, the CEO must issue a written order declaring that the goods in question are subject to a specified item in Schedule 4 to the Customs Tariff Act 1995, with the associated duty rate.
The Act imposes several obligations on the parties involved. The CEO must ensure that applications for TCOs are valid and meet the specified criteria (section 269C). The CEO must also publish a notice in the Gazette inviting submissions on the application, although in this case, no submissions were received (subsection 269K(1)). Furthermore, the Act ensures that the TCO does not affect the rights of any person adversely, nor does it impose any liabilities on any person in respect of actions taken before the TCO was registered (subsection 269S(1)).
Breaching the provisions of the Customs Act 1901 can lead to various consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breaches related to TCOs, the general provisions of the Customs Act include penalties for non-compliance. These can range from fines to imprisonment, depending on the nature and severity of the breach. The maximum penalties for different offences under the Customs Act can be found in relevant sections of the Act and associated regulations.
In summary, Tariff Concession Instrument No. 1052582 facilitates reduced customs duty rates on specified goods, provided they meet the core criteria set out in the Customs Act 1901. The obligations primarily rest on the CEO to assess applications and ensure compliance with the statutory requirements. While the specific penalties for breaches are not detailed in this explanatory statement, general provisions under the Customs Act provide for significant consequences for non-compliance.