EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118390
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.
Creata Pty Ltd applied for a TCO in respect of certain toys on 08 June 2011.
Instrument
TCO No 1118390 was made on 14 November 2011. It declares that those certain toys 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. 1118390 is taken to have come into force on 08 June 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, addresses the issue of customs duty on specific imported goods by providing a framework for Tariff Concession Orders (TCOs). The Customs Act 1901 enables the Chief Executive Officer of Customs to grant tariff concessions to reduce or eliminate customs duty on certain imported goods under certain conditions, as specified in Part XVA of the Act. This legislation aims to facilitate trade by reducing the cost of imported goods, thereby making them more affordable and competitive within the domestic market. The policy objective is to support economic growth and consumer access to a broader range of products by lowering the customs duty on specific goods where domestic production is not viable or competitive.
Scope and Application
The Tariff Concession Instrument No. 1118390, enacted under the Customs Act 1901, applies to specific imported goods, in this case certain toys, which are the subject of a Tariff Concession Order (TCO) application. The Act enables the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, including the absence of substitutable goods produced in Australia. This instrument specifically applies to Creata Pty Ltd's application for tariff concessions on particular toys, and it was made effective from 8 June 2011. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia. The instrument exempts the goods specified in the TCO from the general customs duty, which otherwise stands at 5%, making these goods duty-free under the terms of the order. The TCO does not retroactively affect any rights or impose liabilities on parties other than the Commonwealth, thus ensuring that existing rights are preserved and no new liabilities are created for individuals or entities other than the Commonwealth government.
Key Provisions
The primary operative sections of this piece of legislation (Tariff Concession Instrument No. 1118390) include sections 269C, 269F, and 269P of the Customs Act 1901, which outline the conditions under which the Chief Executive Officer of Customs (CEO) can grant a Tariff Concession Order (TCO). Specifically, Section 269F allows for applications to be made for a TCO in respect of goods, while Section 269C stipulates that such an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, Section 269P mandates that a written order (a TCO) must be made, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, it requires the CEO to ensure that the application for a TCO does not concern goods specified in Section 269SJ, which cannot be subject to a TCO. If the application is deemed valid, the CEO must also make a written order as per Section 269P. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit reasons why the TCO should not be made (Section 269K(1)). In this case, the CEO did not receive any submissions in response to the notice.
Under the Customs Act 1901, breaches of the provisions related to Tariff Concession Orders can lead to various consequences. The Act does not explicitly state penalties for failing to comply with the TCO requirements, but general penalties for breaches of the Customs Act can include fines and imprisonment. For example, under Section 212 of the Customs Act, a person found guilty of an offence against the Act can be fined up to 10,000 penalty units or imprisoned for up to five years, or both. It is important to note that the specific penalties for any breach would depend on the nature and severity of the offence.
In summary, the Tariff Concession Instrument No. 1118390 under the Customs Act 1901 provides a framework for granting tariff concessions on certain goods. The CEO must ensure that applications for TCOs meet specific criteria and are not in respect of prohibited goods. The Act outlines obligations for the CEO to publish notices and make written orders. While the Act does not specify penalties for breaches related to TCOs, general penalties for breaches of the Customs Act can include significant fines and imprisonment.