EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511527
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.
Independent Tyre Distributors applied for a TCO in respect of certain tyres on 02 September 2005.
Instrument
TCO No 0511527 was made on 18 November 2005. It declares that those certain tyres 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. 0511527 is taken to have come into force on 02 September 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, enacted by the Commonwealth Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) that can lower customs duty rates on certain goods. The Act was amended to introduce the TCO scheme to address gaps in the tariff structure, particularly by allowing lower duty rates for goods that are not produced in Australia, thus promoting trade and supporting Australian industries. The Explanatory Statement for Tariff Concession Instrument No. 0511527 indicates that the instrument was introduced to address the specific issue of applying a tariff concession to certain tyres, as identified by Independent Tyre Distributors. The policy objective behind this concession is to ensure that the import of these tyres is not hindered by high duty rates, thereby facilitating trade and potentially lowering costs for consumers. The Instrument was made on 18 November 2005, and it came into force on 02 September 2005, the date on which the application was lodged, without affecting any pre-existing rights or imposing new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0511527, applies to individuals and entities seeking tariff concessions for specific goods imported into Australia. The Act facilitates the application process for Tariff Concession Orders (TCO) through the Chief Executive Officer of Customs, who assesses applications based on specified criteria such as the absence of substitutable goods produced in Australia. The instrument specifically applies to certain tyres as per the application by Independent Tyre Distributors, granting them a lower rate of customs duty by declaring them subject to a prescribed item in the Customs Tariff Act 1995. The application of this TCO does not disadvantage any person and does not impose new liabilities, while providing potential benefits to importers who may apply for refunds on duties paid prior to the TCO's effective date. The instrument’s application is national in scope, affecting all imports of the specified goods across Australia, and it operates within the parameters set by the Customs Act and associated regulations.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0511527, as referenced in the Customs Act 1901 (section 269F), pertain to the application and processing of Tariff Concession Orders (TCOs) for specific goods. The CEO of Customs is empowered to make these orders, which apply lower rates of customs duty to certain goods when the applicant satisfies the core criteria outlined in the Act. Specifically, under section 269C, an application meets the core criteria if, on the date of application, no substitutable goods are being produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written TCO as stipulated in section 269P(3). In this instance, TCO No. 0511527 pertains to certain tyres and was made on 18 November 2005, declaring that these tyres are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
The Act imposes certain obligations on the parties involved. Firstly, applicants for a TCO, such as Independent Tyre Distributors, must ensure that their application meets the core criteria. The CEO, on their part, has the responsibility to assess the application against these criteria and make a decision accordingly. Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who may have reasons against the TCO to lodge a submission. This ensures transparency and provides a platform for stakeholders to voice their concerns. In this case, the CEO did not receive any submissions in response to the notice for TCO No. 0511527.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can result in various consequences. While the explanatory statement does not detail specific offences under the Act, it is known that breaches of customs laws can lead to both civil and criminal penalties. Civil penalties may include fines and other monetary penalties, whereas criminal penalties can result in imprisonment, reflecting the seriousness of non-compliance. The maximum penalties would depend on the specific breach and the severity of the offence as determined by the courts. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it imposes no liabilities on any person in respect of actions taken before the TCO's registration.