EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510007
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.
Warner Bros Movie World Holdings applied for a TCO in respect of certain waterslide parts on 01 August 2005.
Instrument
TCO No 0510007 was made on 14 October 2005. It declares that those certain waterslide parts 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. 0510007 is taken to have come into force on 01 August 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 Australian Parliament, establishes a framework for the administration of customs duties and related matters. In particular, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can reduce the customs duty on certain imported goods. This legislative framework was introduced to facilitate the import of goods that are not produced in Australia, thereby supporting economic efficiency and competitive market conditions. The Tariff Concession Instrument No. 0510007, enacted in 2005, exemplifies this process by granting tariff concessions to Warner Bros Movie World Holdings for specific waterslide parts. This instrument was made after it was determined that no substitutable goods were produced in Australia, in accordance with the criteria set out in the Act. The policy objective here is to ensure that tariff concessions are granted judiciously, balancing the interests of Australian producers and consumers while facilitating the import of goods that enhance economic activity.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for a reduced rate of customs duty on specific goods, subject to certain conditions. An application for a TCO can be submitted by any person, provided the goods in question are not specified in section 269SJ of the Act, which excludes particular goods from tariff concessions. The core criteria for granting a TCO, as outlined in section 269C, necessitate that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The TCO mechanism applies nationally, across all states and territories in Australia, and it is intended to benefit importers by potentially reducing their customs duty liabilities on the specified goods. The TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, thereby safeguarding existing interests. Subordinate instruments may further define terms or extend the application of the TCO provisions.
Key Provisions
The primary sections of this legislation (F2005L03276) pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO, which can result in a lower rate of customs duty for certain goods. Section 269C outlines the core criteria that must be met for a TCO to be considered, notably that no substitutable goods should be produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) mandates that if the application meets these criteria, the CEO must issue a written TCO. In this instance, TCO No. 0510007 applies to certain waterslide parts, reducing their duty rate from 5% to free.
The obligations imposed by this Act on the parties it governs are primarily procedural. The CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ and must verify that the application meets the core criteria as stipulated in section 269C. Once the CEO is satisfied that these conditions are met, they are required to issue a TCO as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit their views on whether the TCO should be made. This was done in the case of TCO No. 0510007, though no submissions were received.
Breach of the requirements set out in the Customs Act 1901 can lead to various legal consequences. The Act does not specify penalties for failing to meet the obligations related to TCOs, but general provisions within the Act and related legislation may apply. For instance, if a person knowingly makes a false statement in an application for a TCO, they could face criminal charges, including fines and imprisonment, under section 257A of the Customs Act 1901. Moreover, any misuse of a TCO, such as claiming a tariff concession for goods not eligible under the order, could result in civil penalties or criminal charges for fraud.
Overall, the Act ensures that the TCO process is transparent and fair, protecting both the interests of the Commonwealth and those of the applicants, while maintaining the integrity of the customs duty system. The legislative framework is designed to streamline the application process and ensure that the benefits of tariff concessions are appropriately and legally distributed.