EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603791
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.
SMS Deisel SparesPty Ltd applied for a TCO in respect of certain commercial vehicle steering parts on 14 February 2006.
Instrument
TCO No 0603791 was made on 21 April 2006. It declares that those certain commercial vehicle steering parts 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. 0603791 is taken to have come into force on 14 February 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 Customs Act 1901, enacted by the Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation addresses the gap in providing tariff relief for specific goods that are not produced in Australia, thereby promoting competitiveness and economic efficiency. The Tariff Concession Instrument No. 0603791, issued under the Customs Act, specifically aims to provide tariff concessions for certain commercial vehicle steering parts, effectively reducing the customs duty from the general rate of 5% to free, as no substitutable goods are produced domestically. The policy objective of this instrument is to facilitate the importation of these parts without financial burden, benefiting the relevant industry by lowering costs and potentially improving the availability and affordability of these goods in the market.
Scope and Application
The Customs Act 1901, specifically through Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which apply reduced customs duty rates to goods that meet certain criteria. This process is available to individuals and entities seeking to import specific goods not produced in Australia. The application must meet core criteria stipulated in the Act, primarily ensuring that no substitutable goods are produced domestically. Upon satisfaction of these conditions, the CEO issues a written order specifying the reduced duty rate applicable to the goods. The TCO extends to the national level, affecting all importers of the specified goods. Notably, the rights of importers are advantageously affected, allowing them to apply for duty refunds on goods imported since the TCO's effective date. There are no reported submissions against the TCO, and it does not disadvantage any person or impose liabilities for actions taken before its registration.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO). A TCO allows for a lower rate of customs duty to apply to specific goods. When a person applies for a TCO in respect of certain goods under section 269F of the Act, the CEO must determine whether the application meets the core criteria set out in section 269C. This involves confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order under section 269P(3) of the Act.
The obligations imposed on the parties by the Act include the requirement for the CEO to make a decision on a TCO application based on whether the goods in question meet the core criteria as outlined in section 269C. If the CEO determines that the application meets the criteria, they must issue a TCO that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) that applies to the goods in question. This order must be made in writing and declare the goods to which the lower rate of duty applies. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application. This process ensures transparency and allows for any objections to be considered before the TCO is issued.
Failure to comply with the requirements of the Act or the terms of a TCO can result in various consequences. While the specific offences, penalties, or consequences for breach are not detailed in the explanatory statement, it is implied that non-compliance could lead to legal repercussions. The penalties for breaching customs regulations can include fines and potential imprisonment, depending on the severity of the breach. Under Australian law, the specifics of such penalties would typically be outlined in the relevant sections of the Customs Act 1901 or related regulations. The TCO itself, however, does not impose any new liabilities on individuals or entities, ensuring that the rights of existing parties are protected.