EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514784
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.
Knorr–Bremse Australia Pty Ltd applied for a TCO in respect of certain Disc Brakes on 21 October 2005.
Instrument
TCO No 0514784 was made on 16 January 2006. It declares that those certain Disc Brakes 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 0%.
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. 0514784 is taken to have come into force on 21 October 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 was enacted to provide a comprehensive framework for the regulation of customs and excise duties in Australia. One significant feature of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows for the application of reduced customs duties on certain goods. The instrument F2006L00197, specifically TCO No. 0514784, was introduced to address the particular needs of Knorr-Bremse Australia Pty Ltd regarding certain Disc Brakes. Enacted by the Parliament of Australia, this legislation aims to facilitate trade by offering tariff relief where applicable, thereby promoting economic efficiency and competitiveness in the market. The policy objective is to ensure that Australian industries can access necessary goods at reduced costs, thereby enhancing their operational viability and international competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0514784 applies to individuals and entities, particularly those involved in the importation of specific goods as defined in the Customs Act 1901. This legislation pertains to the concession of customs duty rates for certain Disc Brakes, which is managed by the Chief Executive Officer of Customs (CEO). The application of this Act is national, as it falls under the purview of the Commonwealth, and it specifically applies to the importation of goods that are subject to a Tariff Concession Order (TCO). The Act does not apply to goods that are specified in section 269SJ of the Customs Act, which excludes certain types of goods from being subject to a TCO. The TCO in question reduces the customs duty from 5% to 0% for the specified Disc Brakes, effective from the date the application was lodged, 21 October 2005. Any subordinate instruments or further regulations would need to be referenced within the broader Customs Act framework to extend or restrict the application of this specific TCO.
Key Provisions
The main operative sections of this legislation include section 269C, which outlines the core criteria that must be met for an application for a Tariff Concession Order (TCO) to be considered valid, and section 269P, which details the process by which the Chief Executive Officer of Customs (CEO) must make a written order if the application meets the criteria. Under section 269C, an application for a TCO will be considered valid if, on the date the application is lodged, there are no substitutable goods produced in Australia in the ordinary course of business. Section 269P requires the CEO to issue a written order if the application is valid and specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. In this instance, TCO No. 0514784 declares that certain Disc Brakes are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a 0% rate of duty.
The Act imposes several obligations and requirements on the parties involved. For instance, under section 269F, any person may apply to the CEO for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO. The CEO must then assess whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets the criteria, they must make a written order (a TCO) as per section 269P. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting any interested party to submit a response if they believe there are reasons why the TCO should not be made. The CEO must then consider any submissions received and decide whether to proceed with the TCO.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can result in various offences and penalties. While the explanatory statement does not detail specific criminal or civil penalties for non-compliance with TCOs, general provisions within the Customs Act 1901 provide for fines and imprisonment for breaches of the Act and its regulations. The penalties for contravening customs laws can be substantial, with maximum fines and imprisonment terms specified in the relevant sections of the Act. For instance, under section 236, a person who knowingly or recklessly makes a false statement in relation to any matter required to be declared under the Act may be subject to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. The specific penalties for breaches related to TCOs would depend on the nature and severity of the breach, and would be determined by the relevant courts.