EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514787
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.
Tyres4u applied for a TCO in respect of certain tubes on 24 October 2005.
Instrument
TCO No 0514787 was made on 23 January 2006. It declares that those certain tubes 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. 0514787 is taken to have come into force on 24 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, enacted by the Australian Parliament, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specified goods. The explanatory statement for Tariff Concession Instrument No. 0514787, issued on 23 January 2006, provides an example of this scheme in action. Tyres4u applied for a TCO for certain tubes on 24 October 2005, and the CEO was satisfied that no substitutable goods were produced in Australia, leading to the declaration that these tubes are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free instead of the general rate of 5%. The policy objective here is to facilitate trade by reducing duty burdens on imported goods where no suitable Australian-made alternatives exist, thus encouraging the importation of goods that cannot be locally produced.
Scope and Application
The Tariff Concession Instrument No. 0514787, made under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) for certain goods, specifically certain tubes in this instance. The Act applies to any person or entity seeking a tariff concession for goods that are not produced in Australia and have no substitutable equivalent domestically. The CEO of Customs is responsible for evaluating applications and determining whether they meet the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this Act is national, given it is a Commonwealth legislation. The application of the TCO is retrospective to the date the application was lodged, meaning that the TCO No. 0514787 is considered to have come into effect on 24 October 2005, the date the application was made by Tyres4u. The TCO does not retroactively affect the rights of any person, except for potentially benefiting importers by allowing them to apply for a refund of duty on imported goods from the effective date of the TCO. The Act does not impose any liabilities on any person as a result of the TCO. The CEO is required to publish notices in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. The application and effect of TCOs can be further defined or extended through subordinate instruments, such as regulations, but these are not detailed in the provided text.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0514787 under the Customs Act 1901 (section 269F) detail the process for applying for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be satisfied for an application to be successful, focusing on the absence of substitutable goods produced in Australia on the day the application was lodged. The CEO of Customs (section 269P(3)) is required to make a written order if these criteria are met, applying a prescribed tariff rate from the Customs Tariff Act 1995 (Schedule 4). For the specific case of Tyres4u's application for certain tubes, the TCO No. 0514787 was issued on 23 January 2006, granting a free rate of duty on these goods, which otherwise would attract a general rate of 5%.
The obligations under the Act primarily concern the CEO's duty to assess applications against the core criteria and make a decision based on the information provided. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting submissions from interested parties and consider any submissions received. In this instance, the CEO did not receive any submissions opposing the TCO for the tubes. Furthermore, the Act stipulates that a TCO is deemed to come into force on the date the application was lodged (subsection 269S(1)), which for TCO No. 0514787 is 24 October 2005. Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person for actions taken before its registration.
In terms of breaches and penalties, the Act does not explicitly outline specific offences or penalties for failing to comply with the requirements of a TCO. However, any failure to adhere to the customs duties and related obligations could potentially result in penalties under the broader Customs Act 1901, which may include fines or imprisonment depending on the severity of the breach. The precise penalties would be determined by the courts based on the nature and extent of the non-compliance. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, thereby protecting those affected by the legislation from any disadvantageous outcomes stemming from the concession.