EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507657
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.
SMS Diesel Spares Pty Ltd applied for a TCO in respect of certain automatic or manual gearboxes on 21 June 2005.
Instrument
TCO No 0507657 was made on 9 September 2005. It declares that those certain automatic or manual gearboxes 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. 0507657 is taken to have come into force on 21 June 2005.
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. 0507657 was enacted under the Customs Act 1901, which provides a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. The primary purpose of this legislation is to address gaps in the availability of certain goods in Australia by allowing importers to apply for tariff concessions where the goods are not produced in Australia and there are no substitutable goods available domestically. This legislation was introduced to facilitate trade by reducing the cost of importing specific goods, thereby benefiting importers and potentially the broader market by making these goods more affordable. The instrument in question was made on 9 September 2005, following an application by SMS Diesel Spares Pty Ltd for certain automatic or manual gearboxes, which now benefit from a reduced duty rate of free, down from the general rate of 5%. The Tariff Concession Order came into effect on 21 June 2005, the date the application was lodged, and it ensures that no existing rights or liabilities of any person, other than the Commonwealth, are adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0507657, made under the Customs Act 1901, pertains to the application of tariff concessions on specific goods, in this instance, certain automatic or manual gearboxes. The Act applies to any person or entity seeking a tariff concession order (TCO) for goods that are not substitutable by goods produced in Australia and meet the core criteria set out in the Act. The geographic and jurisdictional reach of this legislation is nationwide, as it operates under the Commonwealth's customs authority. The application process is initiated by submitting an application to the Chief Executive Officer of Customs (CEO), who evaluates whether the application complies with the specified criteria. The CEO is mandated to make a TCO if no substitutable goods are produced in Australia, which effectively grants a lower or free rate of customs duty on the goods in question. The TCO No. 0507657, in particular, was issued on 9 September 2005, and it came into force on 21 June 2005, the date of application submission by SMS Diesel Spares Pty Ltd. The application process requires public notification, inviting submissions from any interested parties; however, in this instance, no submissions were received. This instrument does not affect the rights or liabilities of any person other than the Commonwealth, ensuring that the rights of importers are positively impacted by the tariff concessions.
Key Provisions
The Tariff Concession Order (TCO) No. 0507657, made under section 269F of the Customs Act 1901, pertains specifically to certain automatic or manual gearboxes (section 269P(3)). The application for this TCO was submitted by SMS Diesel Spares Pty Ltd on 21 June 2005. Once the Chief Executive Officer of Customs (CEO) was satisfied that the application met the core criteria, as stipulated in section 269C, which requires that no substitutable goods were produced in Australia on the date the application was lodged, the CEO was required to make the TCO. This TCO, published in the Gazette on 9 September 2005, declares that the specified gearboxes are subject to a lower rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty from the general rate of 5% to free.
The obligations imposed by this legislation on the parties involved include the requirement for applicants to ensure that their applications meet the core criteria set out in section 269C of the Customs Act. The CEO, in turn, is obligated to assess each application against these criteria and, if satisfied, to make a TCO within the prescribed timeframe. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons the TCO should not be made. While no submissions were received in response to the notice for TCO No. 0507657, the process ensures transparency and the opportunity for public input.
Section 269SJ of the Customs Act 1901 lists goods that cannot be the subject of a TCO. Any application regarding such goods would be invalid. For TCO No. 0507657, the CEO must ensure that the specified gearboxes are not among those listed in section 269SJ. Furthermore, the CEO is required to take into account any submissions received under subsection 269K(1) before finalising the TCO. In the case of TCO No. 0507657, no submissions were received, streamlining the process.
Any breach of the conditions under which a TCO is made could lead to civil or criminal consequences. For instance, if an entity falsely claims that no substitutable goods were produced in Australia, this could result in legal action against the entity involved. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 can attract significant penalties under Australian law, including fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as the provisions of other relevant legislation.