EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603138
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.
Tomcar Pty Ltd applied for a TCO in respect of certain all terrain vehicles on 27 January 2006.
Instrument
TCO No 0603138 was made on 21 April 2006. It declares that those certain all terrain vehicles 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 10%. 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. 0603138 is taken to have come into force on 27 January 2006.
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. 0603138, made under the Customs Act 1901, was introduced to address the issue of reducing customs duty on specific goods to support domestic industries and consumers. Enacted by the Parliament of Australia, this instrument was designed to facilitate tariff concessions that lower the customs duty for certain imported goods, thereby promoting trade and economic growth. The policy objective is to ensure that Australian industries are not unduly burdened by high import tariffs, allowing them to remain competitive both locally and internationally. This instrument, effective from 27 January 2006, allows for a zero per cent duty rate on specified all terrain vehicles, down from the general rate of 10 per cent, provided no substitutable goods are produced in Australia.
Scope and Application
The Customs Act 1901, under its Part XVA, outlines a scheme through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). These orders are applicable to specific goods, where a lower rate of customs duty is implemented as per the provisions of the TCO. Any person may apply to the CEO for such a concession, provided the goods in question are not among those specified in section 269SJ of the Act that are ineligible for a TCO. The CEO evaluates applications against core criteria, primarily whether no substitutable goods were produced in Australia at the time of application. If these criteria are met, a written TCO is issued, specifying the goods and the applicable tariff item from the Customs Tariff Act 1995. TCO No. 0603138, for instance, was issued for certain all terrain vehicles, reducing their duty from 10% to 0%. The CEO is mandated to publish a notice of the application in the Gazette, inviting submissions from interested parties, though no such submissions were received for this particular TCO. This instrument is effective from the date of application lodgement, without retroactive application or imposition of liabilities for actions prior to its enactment.
Key Provisions
The Customs Act 1901 (the Act) establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) (section 269F). A TCO application must meet the core criteria, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order, a TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff) (section 269P(3)). In the case of Tomcar Pty Ltd, a TCO was made on 21 April 2006, applying a zero percent duty rate to certain all terrain vehicles, reducing the general duty rate from 10% (Instrument TCO No 0603138).
The Act imposes several obligations on parties involved in the TCO process. Upon accepting a valid TCO application, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds to consider the application. The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person in relation to actions taken before the TCO's effective date (subsection 269S(1)).
The Act outlines potential consequences for non-compliance. Although the explanatory statement does not detail specific offences or penalties related to breaches of TCO provisions, breaches of the Customs Act generally can lead to civil and criminal penalties. Civil penalties can include fines and the recovery of unpaid duties, while criminal penalties can include imprisonment, reflecting the seriousness of non-compliance with customs regulations. The exact penalties depend on the nature and severity of the breach, as outlined in the broader provisions of the Customs Act.
The TCO process is designed to be transparent and inclusive, allowing interested parties to voice their concerns regarding the concession of customs duties. The fact that no submissions were received in response to the Gazette notice for TCO No 0603138 indicates a smooth process without opposition. The effective date of a TCO is the date the application was lodged, ensuring that any benefits or concessions are retroactive to that date, as seen in the case of Tomcar Pty Ltd's application for the all terrain vehicles. This provision protects the rights of importers by allowing them to apply for duty refunds from the effective date of the TCO.