EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606243
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.
Siemens VDO Automotive applied for a TCO in respect of certain electronic throttle control valves on 4 April 2006.
Instrument
TCO No 0606243 was made on 23 June 2006. It declares that those certain electronic throttle control valves 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. 0606243 is taken to have come into force on 4 April 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. 0606243, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods that are not produced domestically. This instrument, published on 23 June 2006, responds to applications from importers like Siemens VDO Automotive, who sought a lower rate of customs duty for certain electronic throttle control valves not manufactured in Australia. The Tariff Concession Order (TCO) was made to apply a zero percent duty rate to these goods, effective from the date of the application, 4 April 2006. The policy objective of this legislation is to facilitate the importation of goods that are not locally produced, thereby supporting trade and potentially benefiting the rights of importers by allowing them to seek refunds on duties paid before the concession was applied. The enactment body for this instrument is the Chief Executive Officer of Customs, who is mandated to consider and respond to applications for tariff concessions in line with the criteria outlined in the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0606243 under the Customs Act 1901 applies to individuals or entities that have applied for tariff concessions on specific goods, in this case, certain electronic throttle control valves, and which meet the stipulated criteria. The instrument operates within the Commonwealth jurisdiction, providing relief from customs duty for the specified goods as determined by the Chief Executive Officer of Customs. The Act mandates that the CEO must ensure no substitutable goods were produced in Australia on the date the application was lodged, and if satisfied, issue a Tariff Concession Order (TCO). This instrument does not apply to goods specified under section 269SJ of the Act, which outlines items ineligible for tariff concessions. The TCO, once effective, reduces the duty rate from 5% to 0% for the specified electronic throttle control valves, benefiting importers who may apply for duty refunds on imports since the effective date of the TCO. The instrument itself does not disadvantage any person or impose liabilities on anyone in relation to actions taken before its registration.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) 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 the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If an application is made, the CEO must determine if it meets the core criteria set out in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. To meet this criterion, the definition of "substitutable goods" as provided in section 269D must be considered, alongside the definitions of "goods produced in Australia" and "ordinary course of business" in sections 269E and 269F respectively. If the CEO determines that the application meets these criteria, a written order or TCO is issued under section 269P(3), specifying the goods and the applicable rate of duty under the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to carefully assess each application against the core criteria specified in section 269C. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, as required by subsection 269K(1), inviting any interested parties to submit reasons why the TCO should not be granted. This ensures transparency and allows for public input before a decision is made. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on anyone for actions taken before the TCO's registration date, as stated in the Act. The rights of importers are protected, as they can apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
Should any party fail to comply with the obligations set out in the Act, they may face civil or criminal consequences. The Act does not specify particular offences or penalties for breaches of TCO-related provisions; however, general provisions within the Customs Act may apply. These could include fines or imprisonment for wilful or negligent breaches, depending on the severity and intent of the violation. The specifics of penalties would need to be referred to within the broader Customs Act or relevant regulations. It is important for all parties involved to adhere to the requirements to avoid potential legal repercussions.