EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604680
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 applied for a TCO in respect of certain tube waterslide parts on 2 March 2006.
Instrument
TCO No 0604680 was made on 12 May 2006. It declares that those certain tube 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. 0604680 is taken to have come into force on 2 March 2006.
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, established a framework for the regulation of customs and border control, including the provision for Tariff Concession Orders (TCOs) under Part XVA. The Act was designed to address the need for the government to provide targeted tariff reductions to support specific economic activities or industries, thereby encouraging trade and investment. The 2006 Tariff Concession Instrument No. 0604680 is an example of such regulation, introduced to provide tariff concessions on certain tube waterslide parts for Warner Bros Movie World. The instrument was made following an application by Warner Bros Movie World and after satisfying the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The instrument was published in the Gazette with an invitation for submissions, none of which were received, and it came into force on the date the application was lodged, 2 March 2006. The policy objective is to ensure that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders grant a lower rate of customs duty on specified goods if certain criteria are met. An application for a TCO can be made by any person, provided the goods in question are not restricted under section 269SJ of the Act, which includes items such as alcohol, tobacco, and dangerous goods. If the CEO is satisfied that no substitutable goods are produced in Australia and that the application meets the core criteria outlined in section 269C, a TCO will be issued. Such an order was made on 12 May 2006 in respect of certain tube waterslide parts, reducing the duty from the general rate of 5% to free. The CEO is required to consult by publishing a notice in the Gazette, although no submissions were received in response to the notice for this particular TCO. The TCO is effective from the date the application was lodged and does not retroactively affect any person’s rights or impose liabilities on anyone in respect of actions taken prior to the registration of the order.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0604680, as explained in the explanatory statement, revolve around the application and issuance of a Tariff Concession Order (TCO) for certain tube waterslide parts. Section 269F of the Customs Act 1901 allows for the application of a TCO by an interested party, such as Warner Bros Movie World in this case. The Chief Executive Officer of Customs (CEO) is tasked with evaluating the application against the core criteria outlined in sections 269C and 269SJ of the Act. Section 269C stipulates that a TCO application will be deemed to meet the core criteria if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D, 269E, and 269P(3) of the Act. If the CEO is satisfied that these criteria are met, they must issue a written order as a TCO, as specified in section 269P(3). This TCO declares that the specified goods are subject to a prescribed rate of duty, in this instance, the rate being free, as opposed to the general rate of 5% for these goods.
The obligations imposed by the Customs Act 1901 on the parties involved are primarily centred around the application and assessment process for a TCO. The CEO is required to publish a notice in the Gazette, as per section 269K(1) of the Act, inviting any interested parties to submit any objections or submissions regarding the proposed TCO. In this particular case, no submissions were received in response to the published notice. Additionally, the Act dictates that the TCO must come into effect on the date the application for the TCO was lodged, as stated in subsection 269S(1). This means that TCO No. 0604680 is considered to have come into effect on 2 March 2006, the date the application was submitted.
In terms of offences, penalties, or consequences for breach of the Customs Act 1901 and the related TCO, the explanatory statement does not provide explicit information on specific penalties. However, it is important to note that the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration. This provision is meant to protect individuals from any disadvantage or liabilities imposed by the TCO for actions taken before its registration. The Act also stipulates that importers can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations. While the explanatory statement does not detail the specific penalties for non-compliance with the Act or the TCO, it is evident that any breach could potentially result in legal repercussions and financial penalties, as dictated by the overarching legislation and its regulations.