EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105487
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.
Croftminster Pty Ltd applied for a TCO in respect of certain collector or trading card sleeves on 09 February 2011.
Instrument
TCO No 1105487 was made on 03 May 2011. It declares that those certain collector or trading card sleeves 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. 1105487 is taken to have come into force on 09 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 was enacted to provide a regulatory framework for customs duties and border control in Australia. Part XVA of this Act allows for the establishment of Tariff Concession Orders (TCOs) to provide relief on customs duties for certain goods, ensuring that Australian consumers and businesses can access goods at reduced rates under specific conditions. This legislative instrument was introduced to address the gap in providing duty concessions on goods that are not produced domestically and have no suitable substitutes available in Australia. The Tariff Concession Instrument No. 1105487 was made under the authority of the Customs Act 1901 by the Chief Executive Officer of Customs, who is responsible for managing and administering the customs and border protection functions. The policy objective is to facilitate the import of goods that are not manufactured locally, thus benefiting consumers by reducing the cost of such goods and promoting fair competition. The instrument aims to ensure that Australian businesses and consumers are not disadvantaged by high customs duties on essential goods that cannot be produced domestically.
Scope and Application
The Customs Act 1901 applies to individuals, businesses, and entities involved in the importation of goods into Australia. It allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide reduced or free customs duty on specified goods. This applies to the entire Commonwealth of Australia and is enforced under federal law. The application of a TCO is contingent on the goods not being produced in Australia in the ordinary course of business, as defined by the Act, and must meet specific criteria outlined in sections 269C and 269F. Exclusions from TCOs are specified in section 269SJ, which lists goods that cannot be subject to such orders. The application process includes a public consultation period where objections can be lodged, as per section 269K(1). The instrument itself, TCO No. 1105487, pertains to certain collector or trading card sleeves, effective from the date the application was lodged, and is subject to the broader regulatory framework of the Customs Tariff Act 1995.
Key Provisions
The main operative sections of the Customs Act 1901 as related to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F permits an application for a TCO by any person, provided the goods are not those specified in section 269SJ, which lists goods ineligible for a TCO. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a TCO, as outlined in section 269P. Section 269C stipulates that the core criteria are met if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The TCO specifies the new rate of customs duty applicable to the goods, and under section 269S, it is taken to have come into force on the date the application was lodged.
The Customs Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that their application is for goods that are not specified in section 269SJ and that they meet the core criteria as per section 269C. This includes providing sufficient evidence that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must review the application to determine if it meets the core criteria, make a decision within the stipulated timeframe, and publish a notice in the Gazette inviting any objections to the TCO. If no objections are received, the CEO must issue the TCO as specified.
Breach of the conditions or requirements of the Customs Act, including those related to TCOs, can lead to various civil and criminal consequences. For instance, failure to comply with the requirements for a TCO application may result in the application being rejected. In more serious cases, such as fraudulent applications or misrepresentation of facts, criminal penalties may apply. The maximum penalties for customs-related offences can include substantial fines and imprisonment. The specifics of penalties are detailed in the Customs Act and associated regulations, and they can vary based on the severity and intent behind the breach.