EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613316
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 water playground parts on 09 August 2006.
Instrument
TCO No 0613316 was made on 03 November 2006. It declares that those certain water playground 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. 0613316 is taken to have come into force on 09 August 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 Parliament of Australia, established a framework for the administration of customs and excise duties. The Tariff Concession Instrument No. 0613316, introduced in 2006, addresses the need for tariff concessions on specific goods that are not produced domestically, thereby facilitating access to affordable products for businesses and consumers. This instrument was enacted to ensure that the application process for tariff concessions is transparent and inclusive, inviting submissions from interested parties before a decision is made. The policy objective is to promote fair trade practices by providing duty relief on imported goods that do not have local alternatives, thus supporting the economic efficiency and competitiveness of Australian businesses.
Scope and Application
The Tariff Concession Instrument No. 0613316, made under the Customs Act 1901, applies specifically to certain water playground parts, which Macquarie Leisure Operations Ltd applied for a tariff concession on 9 August 2006. The instrument, which came into force on the same date, is designed to provide a lower rate of customs duty on these goods, bringing it down to free from the general rate of 5%. The Act applies to any person or entity applying for a Tariff Concession Order (TCO) concerning goods not specified in section 269SJ of the Act, which details goods ineligible for a TCO. The instrument's jurisdiction extends nationally as it is an instrument of the Commonwealth. There are no stated exclusions or exemptions within the instrument itself, but the process of granting TCOs inherently excludes goods specified under section 269SJ. The Act and its subordinate instruments can extend or restrict the application of TCOs further, providing flexibility in addressing specific tariff needs across various industries and goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0613316 (F2006L03672) pertain to the establishment of a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the application meets the core criteria outlined in sections 269C and 269B, the CEO is required to make a written order under section 269P(3), effectively granting the tariff concession. In this instance, TCO No. 0613316 was made on 3 November 2006, applying to certain water playground parts, specifying that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily directed towards ensuring that the TCO application process is thorough and transparent. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting submissions from any person who believes the TCO should not be made, in accordance with subsection 269K(1). In this case, no submissions were received.
Breaches of the provisions outlined in the Customs Act 1901 and the associated regulations can result in significant penalties. For instance, if a person knowingly provides false or misleading information in an application for a TCO, they may be subject to criminal penalties, including fines and imprisonment, under section 275 of the Customs Act 1901. The maximum penalties for such offences can be substantial, reflecting the seriousness with which the law treats attempts to circumvent the tariff concession process. Furthermore, any failure to comply with the terms of a TCO could result in the imposition of civil penalties, such as fines, as outlined in the relevant regulations. The Act ensures that the tariff concession scheme operates fairly and effectively, protecting the interests of all parties involved.