EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1130627
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.
Sony Computer Entertainment Australia Pty Ltd applied for a TCO in respect of certain dvd player and/or game console controllers on 08 September 2011.
Instrument
TCO No 1130627 was made on 05 December 2011. It declares that those certain dvd player and/or game console controllers 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. 1130627 is taken to have come into force on 08 September 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, establishes a framework for the administration of customs duties, including the provision for Tariff Concession Orders (TCOs) under Part XVA. These TCOs allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The primary objective of this legislative framework is to facilitate trade by reducing the cost of imported goods, thereby making them more competitive in the Australian market. The instrument F2012L00364, which was enacted to provide a tariff concession for specific DVD player and/or game console controllers, addresses the gap by ensuring that these goods are subject to a lower duty rate, contingent on the absence of substitutable goods produced in Australia. The instrument was introduced following an application by Sony Computer Entertainment Australia Pty Ltd and became effective from the date of application, 8 September 2011.
Scope and Application
The Tariff Concession Instrument No. 1130627 under the Customs Act 1901 applies to the specific goods, namely certain DVD player and/or game console controllers, which were the subject of an application by Sony Computer Entertainment Australia Pty Ltd. This Act pertains to the eligibility and process of applying for Tariff Concession Orders (TCOs) by entities seeking lower rates of customs duty on certain goods. The application of this legislation is Commonwealth-wide, meaning it operates across the entire nation, and applies to any entity or person seeking to import the specified goods into Australia. The core criteria for the application of a TCO, as outlined in the Act, include the condition that no substitutable goods are produced in Australia at the time of the application. Any exclusions or exemptions from the application of this Act are defined in section 269SJ of the Customs Act 1901, which specifies goods that cannot be subject to a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments, although this particular instance does not specify any such extensions or restrictions.
Key Provisions
The Tariff Concession Instrument No. 1130627 under the Customs Act 1901 (section 269F) enables the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) for certain goods. This instrument, TCO No. 1130627, applies specifically to certain DVD player and/or game console controllers, declaring that these goods are subject to a tariff concession, thus reducing the duty from 5% to free. The primary condition for a TCO is that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C).
The Customs Act imposes specific obligations on the CEO when considering a TCO application. Once an application is deemed valid and not pertaining to goods specified in section 269SJ, the CEO must determine if it meets the core criteria set out in section 269C. This includes verifying that no substitutable goods were being produced in Australia on the application date (section 269D, 269E). If the CEO is satisfied that the application meets these criteria, a written TCO must be issued, as per section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as stipulated in section 269K(1).
Failure to comply with the requirements of the Customs Act can result in various consequences. While the explanatory statement does not specify penalties for breaches related to TCOs, general penalties for breaches of the Customs Act can include fines and imprisonment. For instance, under section 218 of the Customs Act, a person found guilty of an offence can be subject to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, for serious offences. Civil penalties may also apply, such as fines for non-compliance with customs regulations, which can vary depending on the severity and nature of the breach.
The TCO No. 1130627 does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth in respect of anything done or omitted before the TCO's registration date. Importers of the affected goods stand to benefit from this concession, potentially applying for a refund of duty on goods imported since the TCO's effective date, as provided under paragraph 126(1)(r) of the Regulations.