EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606246
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain car covers on 3 April 2006.
Instrument
TCO No 0606246 was made on 23 June 2006. It declares that those certain car covers 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. 0606246 is taken to have come into force on 3 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders allow for the reduction or exemption of customs duty on specific goods, provided certain criteria are met. The Tariff Concession Instrument No. 0606246, issued on 23 June 2006, is an example of such an order, introduced to address the need for tariff concessions on particular goods. This instrument specifically applies to certain car covers, for which a zero per cent duty rate has been implemented, down from the general rate of five per cent, following an application by Super Cheap Auto Pty Ltd. The process involves the Chief Executive Officer of Customs assessing applications against core criteria and, if satisfied, issuing a TCO. The policy objective is to facilitate the importation of goods by providing tariff relief, thereby benefiting importers and potentially stimulating trade in the affected goods.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to individuals and entities that are involved in the importation of goods, particularly those who seek tariff concessions for specific products. The scope of the Act encompasses the conduct and transactions related to the importation of goods that are subject to customs duties. Geographically, the Act has a national reach as it applies across the Commonwealth of Australia, affecting all states and territories uniformly. The application of the Act can be extended or restricted through subordinate instruments, which allows for adjustments in response to changing economic and trade environments. Notably, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ, thereby delineating clear boundaries to its application. The Act ensures that the rights of individuals and entities are safeguarded, preventing any retrospective disadvantage or imposition of liabilities due to the issuance of a TCO.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0606246 are sections 269C, 269P, and 269S of the Customs Act 1901 (the Act). Section 269C outlines the core criteria for a Tariff Concession Order (TCO) application, which is satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets these core criteria, they must issue a written TCO. Section 269S sets the effective date of the TCO to the date the application was lodged. The instrument specifically applies to certain car covers, reducing the customs duty from 5% to 0% as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties it governs include the requirement for a person to apply to the CEO for a TCO if they wish to benefit from lower customs duty rates for their goods (section 269F). The CEO must then determine whether the application meets the core criteria, including ensuring that no substitutable goods were produced in Australia at the time of application (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO (subsection 269K(1)). Once a TCO is issued, the CEO must ensure that it is effective from the date the application was lodged (section 269S).
Any breaches of the provisions of the Act related to the issuance or application of a TCO may result in civil or criminal consequences. For example, knowingly making a false statement in an application for a TCO could result in penalties as prescribed under section 270 of the Act, which can include fines and imprisonment. However, the Explanatory Statement does not specify the exact penalties for breaches in this context. Importers must also comply with the terms of the TCO when importing the goods and may apply for a refund of duty where applicable (paragraph 126(1)(r) of the Regulations). Failure to adhere to these obligations could lead to the imposition of duties or other penalties as set out in the Customs Act 1901.