EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711936
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 fairground rides and/or equipment on 24 July 2007.
Instrument
TCO No 0711936 was made on 02 October 2007. It declares that those certain fairground rides and/or equipment 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. 0711936 is taken to have come into force on 24 July 2007.
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, includes a mechanism for the reduction of customs duty on specified goods through the issuance of Tariff Concession Orders (TCOs). This process is outlined in Part XVA of the Act, which enables the Chief Executive Officer of Customs to grant concessions where certain criteria are met, such as the absence of substitutable goods produced in Australia. This mechanism was introduced to address the need for economic flexibility and support for specific industries by allowing for tariff reductions on particular goods, thereby promoting trade and economic activity. Warner Village Theme Parks’ application for a TCO concerning certain fairground rides and equipment exemplifies this legislative intent, as the CEO’s approval resulted in a tariff reduction from the general rate of 5% to free, effective from the date of the application, 24 July 2007.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a framework for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislation applies to entities or individuals who seek tariff concessions on imported goods, provided that the goods do not fall under the restricted categories outlined in section 269SJ of the Act. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia, meaning that the goods in question are not locally manufactured and serve a purpose similar to the imported goods. Once the CEO determines that the application meets the core criteria, a TCO is issued, thereby applying a lower rate of customs duty on the specified goods, as per the prescribed items of Schedule 4 to the Customs Tariff Act 1995. The TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. Subordinate instruments may extend or further specify the application of the Act, although no such instruments are mentioned in the provided text.
Key Provisions
The main operative sections of the Customs Act 1901, as referenced in Tariff Concession Instrument No. 0711936, involve the granting of Tariff Concession Orders (TCOs) under section 269F (1). This section allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the CEO is satisfied that the application pertains to goods not listed in section 269SJ, they must then assess whether the application meets the core criteria stipulated in section 269C. This requires a determination that no substitutable goods were produced in Australia on the date the application was lodged. If these criteria are satisfied, the CEO is mandated to issue a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, as per section 269P(3).
The Act imposes certain obligations and requirements on both the applicant and the CEO. For the applicant, it is necessary to submit a valid application that does not pertain to goods listed in section 269SJ. The CEO, on receiving an application, must then ensure that the application meets the core criteria under section 269C, which includes verifying that no substitutable goods were produced in Australia on the application date. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted. This ensures transparency and allows for potential objections to be considered.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in civil or criminal consequences. Although the specific penalties are not detailed in the explanatory statement, breaches of the Act can typically lead to penalties such as fines or, in more serious cases, imprisonment. The exact penalties would be determined based on the nature and severity of the breach, as outlined in other sections of the Act or related legislation.
The Tariff Concession Instrument No. 0711936, which became effective on 24 July 2007, declares that certain fairground rides and equipment are subject to a 5% duty rate, down from the general rate. This concession is contingent on the CEO's determination that no substitutable goods were produced in Australia. The instrument ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person and protects the rights of those who have acted in reliance on the existing legal framework before the TCO's registration.