EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816126
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 applied for a TCO in respect of certain rollar coaster parts on 04 July 2008.
Instrument
TCO No 0816126 was made on 03 October 2008. It declares that those certain rollar coaster 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. 0816126 is taken to have come into force on 04 July 2008.
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 Australian Parliament, established a framework for the application of customs duties and provided for the creation of Tariff Concession Orders (TCOs) to offer tariff relief on certain imported goods. This legislation aimed to address the issue of providing tariff concessions to importers for goods that are not being produced in Australia and do not have a suitable domestic alternative, thereby promoting trade and reducing costs for businesses. Tariff Concession Instrument No. 0816126 was introduced as part of this scheme, specifically for certain roller coaster parts applied for by Warner Bros Movie World, with the objective of ensuring that these imported goods attract a lower customs duty rate of zero percent, as opposed to the general rate of 5 percent, thereby encouraging investment in new attractions without imposing undue burdens on Australian manufacturers.
Scope and Application
The Tariff Concession Instrument No. 0816126, issued under the Customs Act 1901, applies to goods specified in the instrument, namely certain roller coaster parts, for which Warner Bros Movie World applied for tariff concessions. The Act pertains to the authority of the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) that reduce the customs duty on specific goods when no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of the Act is national, as it applies throughout Australia, and its application is executed at the federal level by the CEO. There are specific exclusions as per section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application process requires the CEO to publish a notice in the Gazette and consider any submissions; however, in this case, no submissions were received. The TCO itself came into effect on the date the application was lodged, as per the Act, and it does not affect the rights of any person except to provide benefits to importers, such as the potential for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, as amended, provides a framework through which Tariff Concession Orders (TCO) can be made, primarily through sections 269C, 269F, and 269P (subsection 3). Section 269F allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application pertains to goods not specified in section 269SJ, which excludes certain goods from TCO eligibility, the CEO must assess whether the application meets the core criteria outlined in section 269C. This requires the CEO to confirm that, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets these criteria, a TCO must be issued, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Entities or individuals seeking a TCO must submit a valid application to the CEO, ensuring that it complies with the core criteria. The CEO is obligated to assess the application against these criteria and make a decision within the stipulated timeframe. Should the application meet the criteria, the CEO must issue a written TCO. The CEO also has an obligation to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. In the case of TCO No. 0816126, Warner Bros Movie World applied for a TCO concerning certain roller coaster parts on 4 July 2008, and the CEO issued the TCO on 3 October 2008, declaring that the parts were subject to a zero-duty rate under item 50 of Schedule 4 to the Tariff.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCO applications. However, the general legal framework under which the Customs Act operates would still apply. Any failure to comply with the requirements of a TCO, or any fraudulent application process, could potentially lead to penalties under other relevant sections of the Customs Act or other applicable legislation. For instance, if an entity were found to have made a false statement in their TCO application, they could face penalties under the Crimes Act 1914 for making false statements or under other relevant administrative laws for misleading or deceptive conduct.