EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114758
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.
McPherson's Consumer Products applied for a TCO in respect of certain dominoes games on 11 May 2011.
Instrument
TCO No 1114758 was made on 25 July 2011. It declares that those certain dominoes games 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. 1114758 is taken to have come into force on 11 May 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 by the Commonwealth Parliament to regulate customs and excise duties, providing a framework for the administration of these duties and the enforcement of related laws. The Act was introduced to address the need for a comprehensive and effective system to manage customs duties and associated regulations, ensuring the smooth flow of trade while protecting revenue and enforcing customs laws. Part XVA of the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide for reduced or waived customs duties on certain goods, subject to specific criteria being met. McPherson's Consumer Products sought a TCO for certain dominoes games, which was granted on 25 July 2011, effective from 11 May 2011, the date the application was lodged. The policy objective is to encourage the production of goods within Australia by providing tariff relief where no substitutable goods are produced locally.
Scope and Application
The Customs Act 1901, specifically Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that wishes to apply for a TCO in respect of goods, provided the application does not pertain to goods that are explicitly excluded under section 269SJ. The TCOs are intended to apply a lower rate of customs duty on goods deemed not substitutable by Australian-made products, as defined under sections 269D, 269E, and 269F of the Act. The geographic reach of this legislation is national, as it applies across Australia, and the TCOs are made under the authority of the Commonwealth. The Act allows for the TCOs to be further defined and extended through subordinate instruments, which can provide additional specifications or exclusions not covered in the primary legislation. In the case of TCO No. 1114758, the CEO determined that the application for tariff concessions on certain dominoes games met the core criteria, resulting in a TCO that exempts these goods from the usual customs duty.
Key Provisions
The main sections of Tariff Concession Instrument No. 1114758 under the Customs Act 1901 provide for the concession of customs duty on certain dominoes games, as applied to McPherson's Consumer Products. Under section 269F, an applicant may seek a Tariff Concession Order (TCO) from the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application meets the core criteria under section 269C, they must make a TCO, which was done in this case under section 269P(3). The TCO declares that the specified dominoes games are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general 5% rate.
The Act imposes certain obligations on the parties involved. The CEO must assess whether the application meets the core criteria, specifically checking if no substitutable goods were produced in Australia on the date the application was lodged (section 269C). McPherson's Consumer Products must ensure that their application is valid and meets the criteria. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). In this case, no submissions were received, indicating that the CEO proceeded with the TCO without any objections.
For breaches or non-compliance with the Act, the consequences can include penalties. Although the explanatory statement does not detail specific penalties, the Customs Act 1901 generally provides for civil and criminal penalties for breaches. These can include fines and imprisonment for wilful or negligent breaches. However, in this case, no breaches are indicated, and the TCO has been correctly applied to the specified goods. The rights of importers are protected, and they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any liabilities on any person.