EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509824
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 diesel engine vans on 22 July 2005.
Instrument
TCO No 0509824 was made on 21 October 2005. It declares that those certain diesel engine 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. 0509824 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 Order No. 0509824 was enacted as part of the Customs Act 1901, which provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The objective of this legislation is to address the problem of granting tariff concessions for specific goods, thereby potentially reducing customs duty rates and facilitating trade. The order was introduced to provide tariff concessions for certain diesel engine vans, as applied by Iveco Trucks Australia Limited, and was made effective from the date the application was lodged, 22 July 2005. The policy objective, as stated in the Act, is to ensure that no substitutable goods were produced in Australia at the time of the application, thus justifying the concession under the Customs Tariff Act 1995. This legislative instrument was issued by the Australian Government and does not impose any liabilities on any person, while allowing importers to apply for a refund of duty on goods imported since the commencement date.
Scope and Application
The Tariff Concession Instrument No. 0509824 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on certain goods, specifically diesel engine vans in this instance. The application process involves a submission to the Chief Executive Officer of Customs, who assesses whether the goods meet the criteria for a Tariff Concession Order (TCO). This assessment hinges on whether substitutable goods are produced in Australia, and if the application aligns with the core criteria set out in the Act. Once the CEO determines that the application meets these criteria, a TCO is issued, resulting in the specified goods being subject to a reduced or free rate of customs duty. The application of this Act is national in scope, affecting all individuals or entities importing the specified goods into Australia. There are specific exclusions, such as goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The TCO does not retroactively disadvantage any person or impose new liabilities, only affecting rights from the date of its registration. The Act may be further elaborated through subordinate instruments, which could provide more detailed guidelines or criteria for specific types of goods or industries.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is deemed valid and meets the core criteria set out in section 269C, the CEO must make a written order, known as a TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This process allows for a lower rate of customs duty on the specified goods.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved include the necessity for an application to be submitted by a person seeking a TCO. The CEO must then assess whether the application meets the core criteria, specifically ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This determination is made in accordance with the definitions provided in sections 269D and 269E of the Act. Once the CEO is satisfied that the core criteria are met, a TCO must be issued, declaring the specified goods to be subject to a lower rate of duty.
There are no specific offences or penalties mentioned in the explanatory statement for failing to comply with the requirements of a TCO. However, any breach of the Customs Act 1901 in general may result in criminal or civil penalties, depending on the nature and severity of the breach. The maximum penalties can vary widely and are not specified in this particular explanatory statement, but they could include fines or imprisonment for criminal offences, and financial penalties for civil breaches.
The explanatory statement also notes that the TCO does not affect the rights of any person as at the date of registration, thereby avoiding any disadvantage or imposition of liabilities on persons other than the Commonwealth in respect of actions taken before the date of registration. It further clarifies that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The TCO itself does not impose any liabilities on any person.