EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021202
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 free flow boat ride parts on 11 May 2010.
Instrument
TCO No 1021202 was made on 09 August 2010. It declares that those certain free flow boat 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. 1021202 is taken to have come into force on 11 May 2010.
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, provides a framework for the administration of customs and excise duties. Specifically, Part XVA of the Act outlines a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on goods that are subject to the concession. The Tariff Concession Instrument No. 1021202, issued on 9 August 2010, was introduced to address a specific application from Warner Village Theme Parks for tariff concessions on certain free flow boat ride parts. The CEO of Customs was satisfied that these goods qualified for the concession as no substitutable goods were produced in Australia. The general rate of duty on these parts is 5%, but the TCO granted them a duty-free status, effective from the date the application was lodged, 11 May 2010. The instrument ensures that the rights of importers are beneficially affected, allowing them to apply for refunds of duty on the relevant goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 1021202, made under the Customs Act 1901, applies to Warner Village Theme Parks in their application for a Tariff Concession Order (TCO) concerning certain free flow boat ride parts. This legislation facilitates a reduction in customs duty rates for specified goods when no substitutable goods are produced in Australia in the ordinary course of business. The instrument, which came into force on 11 May 2010, is applicable nationally and affects the rights of importers, allowing them to seek refunds for duties paid on these goods since the TCO's effective date. Notably, the TCO does not impose any liabilities on individuals or entities, nor does it disadvantage anyone regarding actions taken before the order's registration date. The instrument extends its application through subordinate instruments, which may further define the specifics of eligibility and administrative processes for TCO applications.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1021202 (TCO No. 1021202) under the Customs Act 1901 (the Act) relate to the granting of tariff concessions for specific goods. Section 269F (2) of the Act allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for certain goods. If the CEO determines that the application meets the core criteria set out in section 269C, they must make a TCO, as specified in section 269P(3). In this case, Warner Village Theme Parks applied for a TCO in respect of certain free flow boat ride parts on 11 May 2010, and the CEO made TCO No. 1021202 on 09 August 2010, declaring that these parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO is required to assess whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia (section 269C). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person to submit objections to the making of a TCO. Warner Village Theme Parks must have fulfilled the application requirements, including providing evidence that no substitutable goods were produced in Australia. The CEO must also ensure that the TCO does not affect the rights of any person adversely as at the date of registration and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
Under the Act, there are specific consequences for breaches of the provisions. Section 269L states that a person who makes a false or misleading statement in an application for a TCO commits an offence. The maximum penalty for this offence is 500 penalty units or imprisonment for six months, or both. Furthermore, subsection 275(1) of the Crimes Act 1914 stipulates that a person who commits an offence against the Customs Act 1901 can be liable to a penalty of up to 10,000 penalty units or imprisonment for 10 years, or both, if the offence is committed in connection with an international trafficking offence. These provisions underscore the seriousness with which the Act treats compliance with its requirements.