EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507508
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.
Macquarie Leisure Operations Pty Ltd applied for a TCO in respect of certain Fairground Interactive Childrens Rides on 17 June 2005.
Instrument
TCO No 0507508 was made on 9 September 2005. It declares that those certain Fairground Interactive Childrens Rides 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 0%.
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. 0507508 is taken to have come into force on 17 June 2005.
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 Commonwealth Parliament, provides a framework for the imposition of customs duty on imported goods. The Act enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs), which lower the rate of duty on certain goods, thereby addressing the issue of protecting Australian industries by preventing the importation of goods that are produced domestically. In line with this, Tariff Concession Instrument No. 0507508 was introduced on 9 September 2005 in response to an application by Macquarie Leisure Operations Pty Ltd for a tariff concession on Fairground Interactive Childrens Rides. The application was successful as the CEO determined that no substitutable goods were produced in Australia, thereby meeting the core criteria stipulated in the Act. This instrument effectively reduced the duty on these specific rides from 5% to 0%, effective from the date of the application, 17 June 2005, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the application of Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to reduce or waive customs duty on certain goods under specific circumstances. This legislation applies to any person or entity seeking to import goods that are eligible for a TCO, provided that the goods do not fall under the prohibited categories specified in section 269SJ of the Act. For instance, Macquarie Leisure Operations Pty Ltd applied for a TCO for Fairground Interactive Children's Rides, which was subsequently approved. The Act's jurisdiction covers the entire Commonwealth of Australia, with the TCO being a federal instrument. The application process requires that the CEO be satisfied that no substitutable goods are produced in Australia in the ordinary course of business, a criterion defined in sections 269C, 269D, 269E, and 269F of the Act. The TCO does not retroactively affect any existing rights or liabilities, protecting individuals and entities from any adverse consequences that might arise from the application of the concession after the fact.
Key Provisions
The primary operative sections of the Customs Act 1901 that are relevant here include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. These sections collectively provide the framework for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods. If the CEO determines that the application meets the core criteria outlined in section 269C, they must make a TCO, as stipulated in section 269P(3). This TCO specifies a lower rate of customs duty for the goods in question, subject to the conditions outlined in the relevant schedule of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must ensure that any application for a TCO is evaluated against the criteria set out in section 269C. If the application meets these criteria, the CEO is mandated to publish a notice in the Gazette inviting any interested parties to lodge submissions opposing the TCO, as outlined in section 269K(1). If no valid submissions are received, the CEO must proceed to make the TCO. The CEO's role also includes the timely publication of the TCO in the Gazette, as stipulated by section 269S(1). Macquarie Leisure Operations Pty Ltd, the applicant, must ensure that their application is complete and meets all the specified criteria to qualify for a TCO.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. Firstly, if the CEO does not adhere to the procedural requirements, such as publishing notices in the Gazette or evaluating applications against the core criteria, they could face legal challenges. For Macquarie Leisure Operations Pty Ltd, not meeting the core criteria for a TCO could result in the rejection of their application, leading to no tariff concession for their goods. Furthermore, if any party submits false information in their TCO application, they may be subject to civil or criminal penalties under the general provisions of the Customs Act, which could include fines and imprisonment. The maximum penalties for such offences would be determined according to the severity of the offence under the broader customs legislation.