EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134707
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.
Soccer 5s Pty Ltd applied for a TCO in respect of certain sporting playing surface panels on 17 October 2011.
Instrument
TCO No 1134707 was made on 09 January 2012. It declares that those certain sporting playing surface panels 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. 1134707 is taken to have come into force on 17 October 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 the regulation of imports and exports through the Australian Customs Service, ensuring the collection of customs duties and the enforcement of trade-related laws. To address the need for tariff flexibility and to promote economic benefits, the Act incorporates a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). Enacted by the Parliament of Australia, this scheme aims to provide relief from customs duties on specific goods, provided they meet certain criteria and do not have substitutable goods produced domestically. The primary policy objective of this mechanism is to support Australian industries by reducing the cost of imported materials, thereby enhancing competitiveness and potentially fostering local production where feasible.
Tariff Concession Instrument No. 1134707 was introduced on 9 January 2012, following an application by Soccer 5s Pty Ltd for a TCO concerning certain sporting playing surface panels. The CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria under section 269C of the Customs Act 1901. Consequently, the TCO resulted in the duty on these panels being set at free, as opposed to the general rate of 5%. This instrument came into force on 17 October 2011, the date the application was lodged, and did not affect any pre-existing rights or impose new liabilities, while potentially benefiting importers by allowing duty refunds for imports made since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1134707, applies to individuals and entities seeking tariff concessions on imported goods, specifically those subject to the application of the instrument. The instrument was made under section 269F of the Act, and it involves the Chief Executive Officer of Customs (CEO) making a written order known as a Tariff Concession Order (TCO) for certain sporting playing surface panels. The instrument is effective from 17 October 2011, the date the application was lodged, and it provides that these panels are subject to a zero rate of duty, as opposed to the general rate of 5% on such goods. The instrument ensures that the rights of importers are beneficially affected and allows for refunds on duty paid on these goods since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. The CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, although in this case, no submissions were received.
Key Provisions
The main sections of the Customs Act 1901 that are pertinent to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269K. Section 269F outlines the process for applying for a TCO, whereby an individual can apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the application is not for goods specified in section 269SJ, which lists goods ineligible for TCOs, the CEO assesses if the application meets the core criteria, as detailed in section 269C. This criterion requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively. If the CEO finds that the application meets the core criteria, they must make a TCO under section 269P(3), specifying that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities it governs include ensuring that applications for TCOs are made in accordance with the statutory requirements. The CEO is mandated to assess each application against the core criteria and, if satisfied, issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties if they consider the TCO should not be made, as stipulated in section 269K(1). Furthermore, the CEO must ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on such persons in respect of actions taken before the TCO's registration date.
Breaching the provisions of the Customs Act 1901 can lead to various civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties related to TCOs, general penalties for breaches of the Customs Act can include fines and imprisonment. For example, under section 269 of the Customs Act, penalties can range from fines of up to 10,000 penalty units and/or imprisonment for up to five years for individuals, and up to 50,000 penalty units for bodies corporate. The specifics of penalties for non-compliance with TCO provisions would be detailed in the Act and relevant regulations, and would need to be interpreted in the context of broader customs legislation.