EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1104619
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 applied for a TCO in respect of certain multi-game tables on 02 February 2011.
Instrument
TCO No 1104619 was made on 29 April 2011. It declares that those certain multi-game tables 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. 1104619 is taken to have come into force on 02 February 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, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on specified goods, thereby addressing a gap in tariff regulation by offering concessions that may stimulate economic activity by reducing the cost of importing certain goods. This legislative instrument aims to support businesses by lowering import costs where applicable, facilitating trade and potentially increasing competitiveness in the market. The policy objective behind such concessions is to provide relief to businesses that cannot source equivalent goods domestically, thereby encouraging economic growth through facilitated trade.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity seeking a lower rate of customs duty for specific goods, provided these goods are not prohibited under section 269SJ and meet the core criteria outlined in section 269C of the Act. The core criteria necessitate that no substitutable goods were produced in Australia on the date the TCO application was lodged, as defined by sections 269D and 269E. The geographic reach of the Act is national, with the CEO having the authority to make TCOs that apply across Australia. The TCOs themselves are subject to publication in the Gazette, allowing for public consultation before their implementation. The Tariff Concession Instrument No. 1104619, for example, was made effective from the date the TCO application was lodged, on 02 February 2011, and declared that certain multi-game tables would be subject to a free rate of duty. This specific TCO does not disadvantage any person other than the Commonwealth or impose any new liabilities.
Key Provisions
The Tariff Concession Instrument No. 1104619 under the Customs Act 1901 (the Act) pertains to Tariff Concession Orders (TCOs) which allow for reduced customs duty rates on specified goods (sections 269F and 269P(3)). Specifically, this TCO, number 1104619, applies to certain multi-game tables, reducing their duty rate from the general 5% to free duty, as itemised in Schedule 4 of the Customs Tariff Act 1995.
To qualify for a TCO, the Chief Executive Officer of Customs (CEO) must be satisfied that the application meets the core criteria set out in section 269C of the Act. This involves ensuring that, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business (section 269C). Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. Once the CEO is satisfied with the application, a written order must be made declaring that the goods in question are subject to the specified item in Schedule 4 of the Tariff (section 269P(3)).
The Act imposes specific obligations on both the CEO and the applicant. The CEO must ensure that the application meets the core criteria and make the order if satisfied. The applicant, in this case Kmart Australia, must provide sufficient evidence to meet these criteria and may be required to respond to any submissions made against the application (subsection 269K(1)). Moreover, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, no submissions were received (subsection 269K(1)).
Breaches of the requirements set out in the Act could result in civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, it is implied that failure to comply with the provisions for making or implementing a TCO could lead to legal action. The specific penalties for such breaches would depend on the nature and severity of the non-compliance, as outlined in the broader legal framework of the Customs Act 1901 and related regulations.