EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944281
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.
Ardent Leisure Limited applied for a TCO in respect of certain electro magnetically powered fairground amusement ride parts on 23 November 2009.
Instrument
TCO No 0944281 was made on 29 January 2010. It declares that those certain electro magnetically powered fairground amusement 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. 0944281 is taken to have come into force on 23 November 2009.
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 Tariff Concession Instrument No. 0944281 was enacted in 2010 under the Customs Act 1901, designed to address the issue of applying tariff concessions for specific goods that are not produced in Australia. The instrument was introduced to provide a mechanism through which the Chief Executive Officer of Customs can grant tariff concessions for goods where no substitutable goods are produced domestically. This allows for a reduction in customs duty for certain imported goods, thereby potentially lowering costs for importers and facilitating trade. The instrument was developed following an application by Ardent Leisure Limited for tariff concessions on electro magnetically powered fairground amusement ride parts. The policy objective, as outlined in the Act, is to ensure that tariff concessions are granted where appropriate, promoting efficient trade practices without disadvantaging existing domestic producers of substitutable goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking a reduction in customs duty on imported goods by applying for a TCO. The Act provides that if the application meets the core criteria set out in sections 269C and 269SJ, including the absence of substitutable goods produced in Australia, a TCO can be issued. This TCO then designates the goods to which a prescribed rate in the Customs Tariff Act 1995 applies, potentially reducing the duty rate from the general rate to a concessional rate, as seen in TCO No. 0944281 for certain electromagnetically powered fairground amusement ride parts. The Act applies across the Commonwealth of Australia, and its jurisdictional reach is therefore national. The application process requires the CEO to publish a notice in the Gazette inviting submissions from any person who may object to the TCO, although no submissions were received in this case. The TCO does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth, thereby ensuring that the rights of importers are beneficially impacted, allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0944281 (Instrument) pertain to the process of applying for and making a Tariff Concession Order (TCO) under the Customs Act 1901 (Act). Section 269F of the Act allows for the application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. The CEO is then required to decide whether the application meets the core criteria set out in section 269C of the Act. This decision hinges on whether there were any substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). If the CEO is satisfied that the application meets these criteria, a TCO is issued, as per section 269P(3), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This instrument specifically declares that certain electromagnetically powered fairground amusement ride parts are subject to a free rate of duty, whereas the general rate of duty for these goods is 5%.
The Act imposes several obligations on the parties involved. Firstly, the applicant, in this case, Ardent Leisure Limited, must ensure their application meets the specified criteria. This involves providing sufficient evidence that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1) of the Act). The CEO also has the responsibility to assess the validity of the application against the criteria set out in section 269C and to make a decision accordingly.
In terms of breaches and penalties, the Act does not explicitly outline criminal or civil penalties for failing to comply with the requirements of a TCO. However, failure to adhere to the provisions of the Customs Act 1901 generally can result in significant legal consequences. For instance, under section 286 of the Act, a person who contravenes a provision of the Act may be liable to a penalty not exceeding 10,000 penalty units (currently AUD 1.7 million). Additionally, section 287 of the Act states that a person who knowingly or recklessly makes a false or misleading statement in connection with a matter or proceeding under the Act can be subject to a penalty not exceeding 100,000 penalty units (currently AUD 17 million) or imprisonment for five years, or both. These provisions underscore the importance of compliance with the Act's requirements.