EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509577
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.
Ford Motor Company of Australia Limited applied for a TCO in respect of certain pick-up/dump/cab/chassis trucks on 19 July 2005.
Instrument
TCO No 0509577 was made on 07 October 2005. It declares that those certain pick-up/dump/cab/chassis trucks 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. 0509577 is taken to have come into force on 19 July 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 Customs Act 1901 was enacted to facilitate the regulation of customs duties and related matters within Australia. One specific aspect of this legislation is the ability for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, which allow for a lower rate of customs duty on specified goods. The Tariff Concession Instrument No. 0509577, made in 2005, addresses the issue of applying tariff concessions to certain pick-up/dump/cab/chassis trucks, effectively reducing the customs duty rate from the general rate of 5% to free, subject to certain conditions. The instrument was introduced to provide a benefit to importers of these goods by potentially allowing them to apply for a refund of duty paid on imports of the specified trucks since the effective date of the concession. The policy objective is to ensure that the application of tariff concessions does not disadvantage any person and does not impose liabilities on anyone except the Commonwealth.
Scope and Application
The Customs Act 1901, under which the Tariff Concession Instrument No. 0509577 operates, applies to any person or entity seeking tariff concessions for specific goods, provided the goods in question are not specified in section 269SJ of the Act which lists goods that cannot be subject to a Tariff Concession Order (TCO). The Act extends to the Commonwealth and applies to the importation of goods across Australia. The Act allows the Chief Executive Officer of Customs to make a TCO if certain criteria are met, notably if no substitutable goods are produced in Australia in the ordinary course of business. The Instrument, TCO No. 0509577, specifically applies to certain pick-up/dump/cab/chassis trucks and declares that these goods are subject to a reduced customs duty rate, from the general rate of 5% to free, as they meet the core criteria stipulated in section 269C of the Act. The application of this Instrument does not affect existing rights of parties other than the Commonwealth and does not impose any new liabilities on anyone, though it does entitle importers to a refund of duties paid on these goods since the date the TCO was lodged. The Act also allows for the extension or restriction of application through subordinate instruments, although no such extensions or restrictions are mentioned in the context of this particular TCO.
Key Provisions
The Tariff Concession Instrument No. 0509577, as enacted under the Customs Act 1901, outlines the process and criteria for the approval of Tariff Concession Orders (TCOs) for certain goods, specifically certain pick-up/dump/cab/chassis trucks. Section 269C of the Act stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. According to section 269B, the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined by sections 269D, 269E, and 269F respectively. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they are required under subsection 269P(3) to issue a written order (TCO) specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the CEO include accepting a valid TCO application and determining if it meets the core criteria outlined in section 269C. If the criteria are met, the CEO must issue a TCO as specified in subsection 269P(3). Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, no submissions were received. The TCO is considered to have come into force on the date the application was lodged, which in this instance was 19 July 2005. Importantly, the TCO does not affect the rights of any person as at the date of registration to their disadvantage nor impose any liabilities on any person in respect of actions taken prior to the registration date.
The Act does not specify any offences or penalties for breaches directly within the TCO itself. However, any failure by the CEO to properly follow the procedures outlined in the Customs Act 1901 when processing a TCO application could potentially result in administrative or legal consequences. While the TCO does not impose penalties, any subsequent misuse or non-compliance with the terms of the concession could lead to actions under other sections of the Customs Act 1901 or related legislation, which might include fines or other penalties as prescribed by law.