EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101644
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 paints on 13 January 2011.
Instrument
TCO No 1101644 was made on 18 April 2011. It declares that those certain paints 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. 1101644 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 was enacted to regulate the importation and exportation of goods into and out of Australia, with a particular focus on ensuring the collection of customs duty and excise. One of the mechanisms within the Act to address specific trade needs is the Tariff Concession Order (TCO), which allows for a reduced rate of customs duty on certain goods. The Tariff Concession Instrument No. 1101644, made under the Customs Act, was introduced to provide tariff concessions for certain paints applied for by Games Workshop OZ Pty Ltd on 13 January 2011. The Australian Government, through the Chief Executive Officer of Customs, assessed the application and determined that the paints were eligible for a concession, resulting in a tariff rate of free duty as opposed to the general rate of 5%. The process included a public consultation period, during which no objections were received, and the concession came into effect on the date of the application. The policy objective is to support Australian businesses by reducing the cost of imported goods, thereby promoting fair trade and economic efficiency.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These TCOs are intended to provide lower customs duty rates on specified goods, subject to the core criteria outlined in section 269C of the Act. To qualify, the goods in question must not have substitutable goods produced in Australia at the time the application is lodged, as defined by sections 269D, 269E, and 269F of the Act. This legislative instrument specifically applies to entities or individuals seeking to import goods that are not already produced in Australia, with the aim of promoting trade and potentially reducing costs for importers. The geographic reach of this Act is national, extending to all states and territories within Australia. The application of a TCO, such as Tariff Concession Order No. 1101644 for certain paints, becomes effective from the date the application is lodged, as per subsection 269S(1) of the Act. It is important to note that the TCO does not retroactively affect the rights or liabilities of any party other than the Commonwealth, thus ensuring that pre-existing rights are preserved and no new liabilities are imposed on any individual or entity.
Key Provisions
The primary operative sections of this legislation revolve around Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269F). A TCO can be applied for by a person who wishes to have a lower rate of customs duty applied to specific goods. The Chief Executive Officer of Customs (CEO) evaluates these applications against core criteria, such as whether substitutable goods are produced in Australia (section 269C). If the CEO is satisfied that these criteria are met, they must issue a TCO (section 269P(3)). In this case, Tariff Concession Order No. 1101644 was made on 18 April 2011, and it applies to certain paints, granting them a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations on the CEO regarding TCO applications. The CEO must first determine if the application is valid and not in respect of goods specified in section 269SJ, which are ineligible for a TCO. Following this, the CEO must assess whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia (section 269C). If these criteria are satisfied, the CEO must issue a written TCO. Moreover, under subsection 269K(1), the CEO is required to publish a notice in the Gazette, inviting submissions from the public regarding the TCO application. Although in this instance no submissions were received, the CEO's duty to publish such a notice remains.
Failure to comply with the provisions of the Customs Act 1901 can result in various civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties related to TCOs, general provisions in the Customs Act 1901 provide for penalties for breaches, which can include fines and imprisonment. For example, section 268 of the Act stipulates that a person found guilty of an offence against the Act may be subject to fines and imprisonment. However, the maximum penalties would depend on the nature and severity of the breach.
In conclusion, the Tariff Concession Order No. 1101644 provides a duty-free status for certain paints, contingent upon the CEO's determination that no substitutable goods are produced in Australia. The CEO's obligations include assessing applications against the core criteria, publishing notices in the Gazette, and issuing TCOs where appropriate. While the specific penalties for non-compliance are not detailed in this explanatory statement, they can include fines and imprisonment under the general provisions of the Customs Act 1901.