EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619400
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 half pipe ride parts on 06 December 2006.
Instrument
TCO No 0619400 was made on 02 March 2007. It declares that those certain half pipe ride 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. 0619400 is taken to have come into force on 06 December 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 was enacted to provide a framework for the regulation of customs and excise, ensuring efficient border control and revenue collection. The Tariff Concession Instrument No. 0619400, issued in 2007, was introduced to address the need for tariff concessions on specific imported goods, particularly when such goods are not produced in Australia or when no suitable domestic alternatives exist. The instrument was created under the authority of the Chief Executive Officer of Customs, who must consider applications for tariff concessions in line with the criteria set out in the Customs Act. This particular instrument was made in response to an application by Warner Bros Movie World Holdings for tariff concessions on certain half pipe ride parts, where it was determined that no substitutable goods were produced in Australia. The aim of this legislation is to facilitate the importation of these goods at a reduced duty rate, thereby supporting specific industries and potentially lowering costs for businesses reliant on these imports.
Scope and Application
The Tariff Concession Instrument No. 0619400 is a specific application of the Customs Act 1901, which pertains to the process of issuing Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking to import certain goods by facilitating a reduction or exemption in customs duty for those goods. The scope of this Act includes all applications for TCOs that meet the stipulated core criteria, which is primarily concerned with ensuring that the goods in question are not already being produced in Australia in a manner that could substitute for the imported goods. The Act operates on a national level, as it is a Commonwealth Act, and its application extends across all states and territories of Australia. Notably, certain goods, as specified in section 269SJ of the Act, are excluded from the eligibility for a TCO. The TCO No. 0619400, which was issued in 2007, pertains to certain half pipe ride parts, granting them a free rate of duty under specific conditions that were met at the time of application. The Act also includes provisions for consultation and public notice, ensuring transparency in the TCO application process.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0619400 are those that pertain to the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (subsections 269C, 269B, and 269P(3)). These sections specify the criteria an application must meet for the Chief Executive Officer of Customs (CEO) to grant a TCO, which results in a lower rate of customs duty on the goods in question. Specifically, section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Once the CEO determines that the application meets the core criteria, section 269P(3) mandates that a written TCO be issued, declaring the goods subject to the application and specifying the applicable item in Schedule 4 of the Customs Tariff Act 1995.
Under this Act, the CEO is obligated to ensure that any TCO application is assessed against the core criteria and to make a decision within the legislative framework. The CEO must also publish a notice in the Gazette (subsection 269K(1)) as soon as practicable after accepting an application, inviting submissions from any interested parties who may have reasons why the TCO should not be made. If no objections are received, the CEO must proceed to make the TCO if the application meets the criteria. The TCO process ensures that the interests of Australian producers are considered and that only goods that cannot be substituted by Australian-made products are eligible for tariff concessions.
Failure to comply with the requirements set out in the Customs Act 1901 and the Tariff Concession Instrument can lead to various consequences. If an entity fails to meet the criteria for a TCO or makes a false statement in an application, this could be considered a breach of the Act. Such breaches might result in penalties under section 283 of the Customs Act, which can include civil penalties of up to $22,200 or criminal penalties that may lead to imprisonment. The specific penalties depend on the nature and severity of the breach, but the overarching aim is to enforce compliance with the legislative intent to protect Australian production and ensure fair trade practices.
The Tariff Concession Instrument No. 0619400 specifically affects Warner Bros Movie World Holdings by granting them a tariff concession for certain half pipe ride parts, reducing the duty rate from 5% to free. The CEO's decision to grant this TCO was based on the absence of substitutable goods produced in Australia. This decision not only benefits the applicant by reducing import costs but also ensures that the legislative intent to support Australian manufacturing is upheld. The TCO does not affect the rights of any person other than the Commonwealth, as outlined in the Act, and provides a pathway for importers to claim refunds for duties paid on imports since the effective date of the TCO.