EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1123846
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.
TCS John Huxley Australia applied for a TCO in respect of certain bet placing terminals on 19 July 2011.
Instrument
TCO No 1123846 was made on 26 September 2011. It declares that those certain bet placing terminals 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. 1123846 is taken to have come into force on 19 July 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 the importation and exportation of goods in Australia. It provides a framework for the administration of customs duties and other import-export-related charges. The Customs Act 1901 introduced a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (CEO), allowing for a lower rate of customs duty to apply to certain goods. This was intended to address the problem of ensuring fair and competitive access to specific goods within the Australian market, particularly where no equivalent Australian-made products existed. The policy objective behind the establishment of TCOs is to promote economic efficiency and consumer choice by facilitating the importation of goods that are not domestically produced, thus benefiting consumers and businesses alike. The explanatory statement outlines that the CEO of Customs was satisfied with the application for a TCO concerning certain bet placing terminals, leading to the issuance of Tariff Concession Instrument No. 1123846 on 26 September 2011, which reduced the customs duty on these goods from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 1123846 under the Customs Act 1901 applies specifically to the goods subject of the concession, namely certain bet placing terminals, which are now subject to a reduced customs duty rate. This Act pertains to entities that import these specific goods, and the concession applies to the import transactions of these goods within Australia. The instrument extends to the national jurisdiction, encompassing all states and territories of Australia. The scope of the legislation does not include goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The application process and the decision-making authority are vested in the Chief Executive Officer of Customs, who must ensure that no substitutable goods were produced in Australia at the time of application. The application of the concession is contingent upon the CEO's determination that the core criteria are met, which involves verifying the absence of locally produced substitutable goods. The application process also mandates the publication of a notice in the Gazette inviting public submissions, although in this instance, no submissions were received. The commencement date of the concession aligns with the date the application was lodged, thereby ensuring that no existing rights or liabilities of non-Commonwealth entities are adversely affected by the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1123846, under the Customs Act 1901, focus on the procedures and conditions for the application and issuance of Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P(3)). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. Section 269C stipulates that a TCO application is eligible if, at the time of application, no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria, they must issue a written TCO (section 269P(3)). The CEO for this particular application was satisfied that no substitutable goods were produced in Australia and subsequently made the TCO on 26 September 2011, applying a zero-rate duty on certain bet placing terminals.
The obligations and requirements imposed by the Act on the parties involved are primarily centred on the application and approval processes for TCOs. The applicant must submit a valid application to the CEO, ensuring that it pertains to goods not specified in section 269SJ of the Act (section 269F). The CEO, upon receiving the application, must determine if it meets the core criteria outlined in section 269C, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business. If the application is deemed valid and meets the core criteria, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO is also required to make the TCO if the criteria are satisfied (section 269P(3)).
The consequences for breach of the Act or non-compliance with the provisions of a TCO are not explicitly detailed in the Explanatory Statement. However, general breaches of the Customs Act 1901 can lead to various civil and criminal penalties, depending on the severity of the breach. Under section 277 of the Act, a person who contravenes the Act can be subject to penalties that may include fines and imprisonment. The specific penalties for breach of a TCO would depend on the nature and extent of the contravention, as well as any relevant provisions within the broader Customs Act 1901 framework.