EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101643
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.
Games Workshop Oz Pty Ltd applied for a TCO in respect of certain paint carry cases on 13 January 2011.
Instrument
TCO No 1101643 was made on 11 April 2011. It declares that those certain paint carry cases
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. 1101643 is taken to have come into force on 13 January 2011.
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 Parliament of Australia, established a framework for Tariff Concession Orders (TCOs) to provide preferential tariff rates on certain imported goods, thereby addressing the need for economic incentives and market competitiveness. The Act allows the Chief Executive Officer of Customs to make TCOs, reducing customs duty on specified goods if no substitutable goods are produced in Australia. This legislative initiative aims to facilitate smoother trade flows and support industries by making imported goods more cost-effective. The Customs Act 1901 ensures that the rights of importers are positively impacted, with potential refunds on duties already paid since the TCO’s effective date, without imposing new liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 1101643 pertains to the Customs Act 1901 and applies to specific goods, namely certain paint carry cases, for which Games Workshop Oz Pty Ltd sought a Tariff Concession Order (TCO). This Instrument is applicable to the entity Games Workshop Oz Pty Ltd and to the goods it imports, specifically those paint carry cases which now enjoy a concessionary rate of customs duty under the Customs Tariff Act 1995. The legislation is part of a Commonwealth scheme designed to provide tariff concessions for goods that are not produced in Australia and for which no substitutable goods are produced domestically in the ordinary course of business. This Instrument is effective nationwide, aligning with the jurisdictional reach of the Customs Act 1901. The TCO does not apply to any goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The scope of the Act can be extended or restricted through subordinate instruments, though this specific TCO does not impose any new liabilities and benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The Customs Act 1901 includes provisions that allow for the creation of Tariff Concession Orders (TCOs) to apply lower rates of customs duty on certain goods. Under Section 269F, a person can apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO determines that the application is valid and does not pertain to goods specified in Section 269SJ, which are ineligible for TCOs, the CEO must then assess whether the application meets the core criteria outlined in Section 269C. This requires the CEO to confirm that no substitutable goods are being produced in Australia in the ordinary course of business on the day the application is made. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in Sections 269D, 269E, and 269F, respectively.
The obligations imposed by the Customs Act 1901 on parties and entities include the requirement for the CEO to make a written order if satisfied that the application meets the core criteria. This is detailed in Section 269P(3), which mandates the CEO to declare that the goods subject to the TCO application fall under a specified item in Schedule 4 to the Customs Tariff Act 1995. Furthermore, Section 269K(1) obligates the CEO to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In the case of TCO No. 1101643, no submissions were received in response to this notice.
Breaching the provisions of the Customs Act 1901, particularly the misuse or misdeclaration of goods eligible for TCOs, can result in significant legal consequences. While the explanatory statement does not detail specific offences or penalties, the Act generally provides for substantial fines and potential imprisonment for breaches involving fraud or misrepresentation. Under the Customs Act, penalties can include fines up to a substantial amount and imprisonment for terms that vary depending on the severity of the offence. Additionally, any misrepresentation or incorrect claims for tariff concessions can lead to civil actions for damages by affected parties, further highlighting the importance of compliance with the Act's requirements.