EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509823
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.
Iveco Trucks Australia Limited applied for a TCO in respect of certain vans on 22 July 2005.
Instrument
TCO No 0509823 was made on 14 October 2005. It declares that those certain vans 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. 0509823 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0509823 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this case, certain vans, to ensure they are subject to a lower rate of customs duty. This instrument was created in response to an application by Iveco Trucks Australia Limited, which sought to have the customs duty on certain vans reduced from the general rate of 5% to free. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders if certain criteria are met, including that no substitutable goods are produced in Australia. In this instance, the CEO determined that the application met the necessary criteria, thereby allowing for the concession. The instrument was introduced without any objections from the public, as no submissions were received in response to the notice published in the Gazette. The policy objective behind this legislation is to facilitate the import of goods by reducing their customs duty, thereby potentially lowering costs for businesses and consumers while ensuring compliance with the Act's provisions.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which the Chief Executive Officer (CEO) of Customs may issue Tariff Concession Orders (TCOs). These orders apply to specific goods and grant a lower rate of customs duty to those that meet certain criteria. An application for a TCO can be made by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO determines that the application is valid, they must issue a written order declaring that the specified goods are subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995. The TCO applies nationally across Australia and does not disadvantage any person, including importers who can apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force.
Key Provisions
The main operative sections of the Customs Act 1901, as implemented through Tariff Concession Instrument No. 0509823, revolve around the creation and application of Tariff Concession Orders (TCOs) as outlined in section 269F (subsection 269P(3)). These sections mandate that the Chief Executive Officer (CEO) of Customs may make a TCO if an application is lodged and the core criteria are met. Section 269C stipulates that these core criteria are satisfied if, on the date of the application, there are no substitutable goods produced in Australia in the ordinary course of business. This instrument, TCO No. 0509823, was made on 14 October 2005 and it declares that certain vans are goods to which item 50 of Schedule 4 to the Tariff applies, with the duty rate being reduced from 5% to free.
The Customs Act 1901 imposes specific obligations on the CEO when processing TCO applications. Firstly, the CEO must ensure that the application is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application is valid, the CEO must then assess whether the core criteria, as outlined in section 269C, are met. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied with the application, they must then issue a written order declaring the goods subject to the TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made, as stipulated in subsection 269K(1).
The Act also specifies the consequences of a breach or non-compliance with the provisions outlined in the Tariff Concession Instrument. However, the document does not explicitly mention any offences, penalties, or specific consequences for non-compliance in this context. Given the nature of the instrument, any breaches would likely be addressed under the general provisions of the Customs Act 1901, which could include administrative penalties, fines, or legal actions as appropriate for non-compliance with customs regulations. The exact penalties would depend on the nature and severity of the breach, but they could range from financial penalties to more severe legal consequences.