EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618759
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 Village Theme Parks applied for a TCO in respect of certain water spray fans on 24 November 2006.
Instrument
TCO No 0618759 was made on 2 March 2007. It declares that those certain water spray fans 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. 0618759 is taken to have come into force on 24 November 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, establishes a framework for the regulation of customs duties, including provisions for Tariff Concession Orders (TCOs). These orders, administered by the Chief Executive Officer of Customs, aim to reduce customs duty rates for specified goods under certain conditions. Specifically, the Act allows for lower duty rates if the goods in question are not produced domestically and there are no substitutable goods available in the Australian market. This mechanism is designed to support Australian importers by making certain goods more competitively priced, thus encouraging trade and economic growth. Instrument No. 0618759, enacted on 2 March 2007, is a practical application of this framework, reducing the duty on certain water spray fans from 5% to 0%. The instrument was introduced following an application by Warner Village Theme Parks, and it came into effect on 24 November 2006. The process involved public consultation, although no submissions were received in opposition to the order.
Scope and Application
The Customs Act 1901, particularly as applied through Tariff Concession Instrument No. 0618759, pertains to the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking a reduction in customs duty on specified goods through a TCO application. The application process involves determining whether the goods in question are substitutable by any produced in Australia, with a TCO granted if no such substitutable goods exist. This instrument is a Commonwealth-level regulation, affecting all importers and exporters within Australia who deal with the specified goods, namely certain water spray fans in this case. The TCO is effective from the date the application was lodged, in this instance, 24 November 2006, and benefits importers by providing them with the ability to apply for a refund of duty on the goods imported since that date. The TCO does not impose any liabilities on any person.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269B, 269E, 269D, and 269P) establish the framework for the creation of a Tariff Concession Order (TCO) under the Customs Act 1901. According to section 269C, a TCO application will meet the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ are defined by sections 269D, 269E, and 269F respectively. If the Chief Executive Officer (CEO) of Customs is satisfied that the TCO application meets the core criteria, they must make a written order (section 269P(3)) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties it governs. An applicant for a TCO must ensure their application is not in respect of goods specified in section 269SJ of the Act and meets the core criteria under section 269C. The CEO must then decide whether the application meets these criteria and, if so, make a written order. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who believes the TCO should not be made to lodge a submission. Any person who considers that there are reasons why the TCO should not be made must submit their views to the CEO within the specified timeframe.
There are no specific offences, penalties, or civil or criminal consequences outlined for breach of the Act in the Explanatory Statement. However, the Act generally provides that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration in a way that would disadvantage that person or impose liabilities in respect of anything done or omitted before the date of registration. Therefore, if a breach occurs, it is likely to be subject to the general provisions of the Customs Act 1901 and the Customs Tariff Act 1995, which could include fines or other penalties as prescribed by law.
In summary, the Act facilitates the creation of TCOs for goods that meet specific criteria, ensuring that no substitutable goods are produced in Australia. It outlines the process for application, review, and publication, as well as the commencement date for the TCO. While the Explanatory Statement does not detail specific penalties for breach, the Act ensures that the rights of non-Commonwealth persons are protected, and no liabilities are imposed retroactively.