EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607155
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 Ltd applied for a TCO in respect of certain waterslide parts on 20 April 2006.
Instrument
TCO No 0607155 was made on 14 July 2006. 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. 0607155 is taken to have come into force on 20 April 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 Tariff Concession Instrument No. 0607155, enacted in 2006, amends the Customs Act 1901 to provide a mechanism for tariff concessions on specific goods. This legislation addresses the gap in the tariff structure by allowing the Chief Executive Officer of Customs to grant reduced customs duties on certain goods, provided no substitutable goods are produced in Australia and the application meets the core criteria. The policy objective is to encourage trade by lowering the cost of importing specific goods, thereby benefiting importers and potentially stimulating domestic demand for these products. The instrument was made in response to an application by Macquarie Leisure Operations Ltd for tariff concessions on certain waterslide parts, which the CEO of Customs approved after determining that no substitutable goods were produced domestically. The instrument came into force on the date of the application, 20 April 2006, and does not affect any existing rights or impose new liabilities on individuals.
Scope and Application
The Tariff Concession Instrument No. 0607155 under the Customs Act 1901 applies to Macquarie Leisure Operations Ltd, specifically concerning certain waterslide parts. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods, provided certain criteria are met. In this case, the CEO determined that no substitutable goods were produced in Australia, leading to the issuance of the TCO which exempts these waterslide parts from the general rate of duty of 5%, making them duty-free. The TCO applies from the date the application was lodged, 20 April 2006, and benefits importers by potentially allowing them to claim a refund of duty on goods imported since that date. Importantly, the TCO does not affect the rights of any person adversely or impose any new liabilities on them. The Act provides for consultation by inviting submissions from interested parties, though none were received in this instance. The scope of the TCO is confined to the specific goods in question and does not extend to any other goods unless specifically addressed in subsequent orders.
Key Provisions
The Tariff Concession Instrument No. 0607155, made under the Customs Act 1901, specifically addresses the application of tariff concessions for certain waterslide parts. Section 269F of the Act outlines the process by which an applicant, in this case Macquarie Leisure Operations Ltd, may apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning these waterslide parts. The CEO is required to assess whether the application meets the core criteria established in section 269C, which essentially means that no substitutable goods should be produced in Australia on the day the application was lodged. In this instance, the CEO found that no such substitutable goods were being produced, leading to the issuance of the TCO.
The obligations imposed on the parties under this Act are primarily on the CEO, who must ensure that the core criteria are met before making a TCO. This involves verifying that no substitutable goods are being produced in Australia and that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as mandated by section 269K(1). The TCO itself, as per section 269S(1), is deemed to have come into force on the day the application was lodged, which in this case was 20 April 2006.
Failure to comply with the provisions of the Customs Act 1901 can result in civil or criminal penalties. Although specific penalties for breaches related to TCOs are not detailed in the Explanatory Statement, the Act generally provides for substantial fines and potential imprisonment for serious breaches. The exact penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act and related legislation. It is also important to note that the TCO does not affect the rights of any person other than the Commonwealth in respect of actions taken before the TCO's registration date, ensuring that no existing rights or liabilities are adversely impacted.