EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1109274
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.
Axima Pty Ltd applied for a TCO in respect of certain playing cards, collector or trading on 17 March 2011.
Instrument
TCO No 1109274 was made on 27 July 2011. It declares that those certain playing cards, collector or trading 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. 1109274 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 was enacted to facilitate trade by providing a framework for the regulation of customs and excise, including the imposition and collection of duties and taxes. The Tariff Concession Instrument No. 1109274, made under the Act in 2011, addresses the need for tariff concessions on specific goods that are not produced domestically and thus cannot be substituted with Australian-made alternatives. This instrument was introduced to provide relief to importers by lowering the customs duty rate on certain goods, in this case, playing cards for collectors or trading, from the general 5% rate to free. The instrument was created following an application by Axima Pty Ltd and subsequent satisfaction by the Chief Executive Officer of Customs that the application met the core criteria for tariff concessions. The policy objective, as stated in the explanatory statement, is to allow for tariff concessions where no substitutable goods are produced in Australia, thus benefiting importers and potentially the broader market by reducing the cost of such goods.
Scope and Application
The Customs Act 1901 applies to all persons and entities engaging in the importation of goods into Australia, with specific focus on the application of tariff concession orders (TCOs) as outlined in Part XVA. This legislation allows for the granting of TCOs by the Chief Executive Officer of Customs, which can provide a lower rate of customs duty for certain goods. A TCO can be applied for by any individual or entity, provided the goods in question are not specified in section 269SJ of the Act, which includes those goods that cannot be subject to a TCO. The scope of the Act extends nationally and applies to all states and territories within Australia, ensuring a uniform application of tariff concessions. The Act allows for the exclusion of certain goods from TCOs and the process includes provisions for public consultation where applicable. The instrument in question, TCO No 1109274, applies to specific playing cards for collecting or trading, granting them a free rate of duty under certain conditions, and came into force on the date of the application, 17 March 2011.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1109274 (TCO No. 1109274) under the Customs Act 1901 require the Chief Executive Officer of Customs (CEO) to assess applications for Tariff Concession Orders (TCOs) on certain goods, such as playing cards intended for collection or trading (sections 269F, 269C, 269P(3)). If the CEO is satisfied that the application meets the core criteria—specifically, that no substitutable goods were produced in Australia at the time of application (section 269C)—the CEO must make a written order that declares the goods to which the TCO applies. The TCO then specifies the reduced customs duty rate for these goods, which in this case is free, whereas the general rate is 5% (Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed on the parties governed by this Act include the requirement for applicants to submit a valid application to the CEO for a TCO. The CEO, in turn, has the obligation to assess whether the application meets the core criteria (section 269C) and, if satisfied, to make a written order (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any person who considers the TCO should not proceed to submit a submission (subsection 269K(1)). In this instance, no submissions were received in response to the notice.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly outline specific criminal or civil penalties for failing to comply with the provisions of a TCO. However, failure to adhere to the terms of the TCO could potentially result in disputes over duty payments, with importers or exporters facing financial liabilities for any duties not correctly applied or refunded. The general legal framework within which these instruments operate includes provisions for enforcement and penalties under the Customs Act 1901, which may apply in cases of non-compliance with customs regulations, although these are not detailed in the specific TCO.