EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511534
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 0511534 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. 0511534 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 Australian Parliament, provides for the regulation of customs and excise, including the imposition of duties and tariffs on imported goods. Specifically, Part XVA of the Act establishes a framework for Tariff Concession Orders (TCOs), which can be applied for by interested parties to potentially reduce the customs duty on certain goods. The Tariff Concession Instrument No. 0511534, enacted in 2005, is an example of such an order. It was introduced to address the specific needs of the importer, Independent Tyre Distributors, by granting a tariff concession on certain tyres. The policy objective of the Act, as highlighted in the explanatory statement, is to ensure that such concessions are granted where no substitutable goods are produced in Australia, thereby potentially benefiting importers by reducing their duty liabilities. The instrument was published in the Gazette with an invitation for submissions, none of which were received, and it came into force on the date the application was lodged, 2 September 2005.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs, aiming to lower the customs duty rates on certain imported goods. Specifically, the Act applies to individuals or entities seeking to import goods that are not produced domestically in a way that corresponds to the intended use of the imported goods. This Act applies on a national level, with its provisions extending to all jurisdictions within Australia. The scope of the Act includes a range of industries and goods, provided they meet the specific criteria for tariff concessions. Importantly, certain goods explicitly listed in section 269SJ of the Act are excluded from TCOs. The Act also allows for the extension or restriction of its application through subordinate instruments, thereby providing flexibility in its implementation and enforcement. The process of issuing a TCO involves a rigorous assessment by the CEO of Customs to ensure that the application meets the core criteria as outlined in sections 269C and 269S of the Act. Once a TCO is issued, it operates from the date the application was lodged, offering immediate relief to the importers of the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901, particularly sections 269C, 269B, and 269P(3), establish a framework for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For example, TCO No. 0511534 applies to certain tyres, which are now subject to a rate of duty of free, as opposed to the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. An applicant must submit a valid application to the CEO for a TCO, ensuring that the goods in question are not listed in section 269SJ. The CEO is required to assess whether the application meets the core criteria and make a decision accordingly. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In the case of TCO No. 0511534, no submissions were received. Once the TCO is made, the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 outlines specific consequences for breaches of its provisions. Although the Act does not explicitly detail offences, penalties, or civil/criminal consequences for breaching the TCO provisions, it is likely that general provisions within the Customs Act and related legislation would apply. These could include fines, imprisonment, or other penalties for non-compliance with customs regulations. The specifics of penalties would be determined in accordance with the broader framework of the Customs Act and associated regulations, which may include substantial fines and imprisonment for serious breaches. It is essential for applicants and the CEO to adhere strictly to the Act's requirements to avoid any potential legal repercussions.