EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1104805
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 Ltd applied for a TCO in respect of certain roller coaster ride parts on 02 February 2011.
Instrument
TCO No 1104805 was made on 29 April 2011. It declares that those certain roller coaster 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. 1104805 is taken to have come into force on 02 February 2011.
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, establishes a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on specified goods, aiming to facilitate trade and economic growth by reducing the cost burden on importers. The Act was designed to address the problem of high customs duties on certain imported goods, which can hinder the competitiveness of Australian businesses and consumers. The objective is to ensure that essential goods are available at a reduced cost, thereby supporting the economic efficiency and welfare of the country. The explanatory statement accompanying Instrument No. 1104805, made under the Customs Act, details a specific instance where certain roller coaster ride parts were granted tariff concessions, reflecting the Act's policy to selectively reduce customs duties on goods that are not produced domestically and have no substitutable alternatives.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who can demonstrate that the goods for which they seek a TCO are not produced in Australia and that they meet the core criteria specified in the Act. The scope of the Act is national, extending across the Commonwealth of Australia, and its application is facilitated through subordinate instruments. The Tariff Concession Instrument No. 1104805, which was made on 29 April 2011, is an example of such an instrument. This specific TCO, pertaining to certain roller coaster ride parts, became effective on the date of application, 02 February 2011, and provides a concession by applying a rate of duty of free, down from the general rate of 5%. The CEO's decision-making process includes publishing a notice in the Gazette to invite submissions from interested parties, though in this instance, no submissions were received. The TCO does not adversely affect the rights of any person other than the Commonwealth and provides benefits to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 includes provisions that enable the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) under section 269F (1). These TCOs allow for a lower rate of customs duty on certain goods specified in the order. For instance, in this case, TCO No. 1104805 was made on 29 April 2011, specifying that certain roller coaster ride parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods. The CEO must ensure that the application meets the core criteria, which include the absence of substitutable goods being produced in Australia on the date the application was lodged (section 269C). If the CEO is satisfied with the application, they must make a written order, as outlined in section 269P(3).
Under the Act, the CEO has specific obligations when processing a TCO application. According to section 269K(1), the CEO must publish a notice in the Gazette once a TCO application is accepted as valid. This notice includes an invitation for any person to submit reasons why the TCO should not be made. In this case, no submissions were received by the CEO in response to the notice. The CEO must also ensure that the TCO does not adversely affect the rights of any person as at the date of registration, nor impose any liabilities for actions taken before the TCO came into force (subsection 269S(1)). Consequently, importers can apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
Any breaches of the Customs Act 1901 can result in significant consequences. Although the explanatory statement does not detail specific offences related to the TCO process, the Act includes general provisions for penalties. For instance, section 283 of the Act provides for fines and imprisonment for serious breaches of the customs laws. The penalties for contravening the Act can include substantial fines, and in some cases, imprisonment. The exact penalties would depend on the nature and severity of the offence, as defined by the Act and relevant regulations.