EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1109273
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 cards on 17 March 2011.
Instrument
TCO No 1109273 was made on 6 June 2011. It declares that those certain collector or trading cards 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. 1109273 is taken to have come into force on 17 March 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, provides a framework for the administration of customs duties and the regulation of imports and exports. Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can lower the rate of customs duty on certain goods. The Tariff Concession Instrument No. 1109273, made on 6 June 2011, applies this framework to certain collector or trading cards, granting them a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from 17 March 2011, the date of the application by Croftminster Pty Ltd. The instrument was introduced to address the specific needs of these goods by providing a concession that ensures they are not subject to the general 5% duty rate. The policy objective, as outlined in the explanatory statement, is to facilitate the import of these goods without imposing additional burdens on importers, while ensuring that no existing rights or liabilities are adversely affected by the concession.
Scope and Application
The Tariff Concession Instrument No. 1109273, under the Customs Act 1901, applies to Croftminster Pty Ltd's application for tariff concessions on certain collector or trading cards. This instrument allows for a reduced customs duty rate, from the general 5% to a rate of free, for the specified goods, provided that no substitutable goods are produced in Australia. The scope of this Act encompasses entities like Croftminster Pty Ltd that apply for tariff concessions on goods specified in the Customs Tariff Act 1995, ensuring they meet the core criteria stipulated in section 269C of the Customs Act 1901. The legislation has a Commonwealth jurisdictional reach and extends its application to all entities within the Australian territory, excluding those goods listed in section 269SJ of the Act which cannot be subject to a TCO. This instrument does not disadvantage any person, other than the Commonwealth, and does not impose liabilities on any person in relation to actions taken before the instrument's registration.
Key Provisions
The primary operative sections of the Customs Act 1901, relevant to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P (subsection 3). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, while section 269C outlines the core criteria that the CEO must consider in deciding whether to grant the TCO. If the CEO is satisfied that the application meets the core criteria, section 269P(3) mandates that the CEO must issue a written TCO declaring that the goods in question are subject to a prescribed rate of duty.
The Customs Act imposes certain obligations and requirements on the parties involved in the TCO process. The CEO is obligated to assess applications for TCOs against the core criteria, which include verifying that no substitutable goods are produced in Australia (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed (subsection 269K(1)). Croftminster Pty Ltd, in this case, applied for a TCO on 17 March 2011, and the CEO subsequently issued TCO No. 1109273 on 6 June 2011, declaring that the specified collector or trading cards were subject to a 0% duty rate.
Breaching the requirements set forth in the Customs Act can lead to various civil and criminal consequences. For instance, if a person knowingly or negligently imports goods that are not eligible for a TCO or fails to comply with the terms of a TCO, they may face legal action. The maximum penalties for such offences can include fines and imprisonment. Specifically, under the Customs Act, the penalties for fraudulent conduct can be substantial, with fines potentially reaching up to $22,000 for individuals and $110,000 for corporations, alongside possible imprisonment terms. It is essential for all parties involved to adhere to the regulations to avoid these serious repercussions.