EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511531
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 0511531 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. 0511531 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 Tariff Concession Instrument No. 0511531, enacted under the Customs Act 1901, aims to provide tariff concessions on certain goods, facilitating their importation by reducing the customs duty. The instrument was introduced to address the issue of ensuring that specific goods, in this case certain tyres, can be imported at a reduced duty rate when they are not produced domestically and no suitable substitutes are available. This instrument was created to promote fair trade practices and to support the import of essential goods that are not manufactured within Australia, thus aiding in economic efficiency and market competitiveness. The instrument was enacted by the Chief Executive Officer of Customs, as authorised by the Act, with the policy objective of ensuring that tariff concessions are applied appropriately to benefit trade while maintaining the integrity of the domestic market.
The Tariff Concession Order (TCO) No. 0511531 was issued following an application by Independent Tyre Distributors, which was accepted as valid by the CEO. The order specifies that certain tyres are subject to a tariff rate of zero, as no substitutable goods are produced in Australia, thereby lowering the cost for importers. This order came into force on the date the application was lodged, 2 September 2005, and provides for a refund of duty for importers of these goods since that date. Importantly, the TCO does not impose any liabilities on persons other than the Commonwealth and does not adversely affect existing rights.
Scope and Application
The Tariff Concession Instrument No. 0511531 applies to specific goods, namely certain tyres, and the entity that applied for the concession, Independent Tyre Distributors. It operates under the Customs Act 1901, specifically Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to the goods specified in the TCO and the industry involved in the importation of these goods. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia. However, it excludes goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The application of this legislation can be extended or restricted through subordinate instruments, as outlined in the Act. The TCO in question became effective on the date the application was lodged, 2 September 2005, and it provides a rate of duty of free for the specified goods, reducing the general rate of duty from 5%.
Key Provisions
The primary operative sections of this legislation concern the creation and application of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in relation to certain goods. Once the application is deemed valid and does not pertain to goods specified in section 269SJ, the CEO must determine if it meets the core criteria outlined in section 269C. This requires that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO must issue a written order, as stipulated in section 269P(3), declaring the goods subject to the TCO and specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. For example, in this case, TCO No. 0511531 was made, applying to certain tyres which now have a free duty rate instead of the general rate of 5%.
The obligations and requirements imposed by the Act on parties governed by it include the need for applicants to ensure their applications meet the core criteria before submission. Once an application is accepted as valid, the CEO is obligated to publish a notice in the Gazette, inviting submissions from any interested parties who believe the TCO should not proceed. In this instance, the CEO did not receive any submissions in response to the published notice. Furthermore, the Act mandates that the TCO's effective date is the date the application was lodged, ensuring that any rights of the parties are preserved without retroactively imposing new liabilities. Importers, in particular, benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date.
Breaching the provisions of the Customs Act 1901 and related regulations can lead to various civil and criminal consequences. While the explanatory statement does not specify particular offences or penalties, the general nature of breaches can lead to administrative penalties, fines, or other legal actions as outlined in the Customs Act and associated legislation. The severity of penalties may depend on the nature and extent of the breach, with potential maximum penalties varying based on the specific breach and applicable laws. For example, knowingly providing false information in an application or failing to comply with a TCO could result in legal action under the relevant sections of the Act.