EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607539
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.
Australian Tyre Manufacturers applied for a TCO in respect of certain agricultural and/or forestry pneumatic tyres on 27 April 2006.
Instrument
TCO No 0607539 was made on 14 July 2006. It declares that those certain agricultural and/or forestry pneumatic tyres 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. 0607539 is taken to have come into force on 27 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, facilitates the establishment of Tariff Concession Orders (TCO) to provide tariff concessions on certain goods. This legislative framework was introduced to address the need for tariff adjustments to promote fair trade practices and economic efficiency by allowing the Chief Executive Officer of Customs to make TCOs that apply a lower rate of customs duty on specified goods. The Tariff Concession Instrument No. 0607539 was made under this Act to provide a tariff concession on certain agricultural and forestry pneumatic tyres, reducing the duty rate from the general 5% to free, effective from the date the application was lodged. This instrument was made following a valid application by Australian Tyre Manufacturers and no objections from the public, ensuring that the policy objective of facilitating the importation of these goods at a reduced duty rate is achieved.
Scope and Application
The Tariff Concession Instrument No. 0607539 under the Customs Act 1901 applies to the specific category of agricultural and forestry pneumatic tyres, as identified by Australian Tyre Manufacturers, and aims to provide a concessionary rate of customs duty on these goods. This instrument operates within the framework established by Part XVA of the Customs Act, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) if certain criteria are met, including the absence of substitutable goods produced in Australia. The scope of the Act encompasses the application process, the evaluation of core criteria by the CEO, and the issuance of TCOs that stipulate the applicable duty rates as specified in the Customs Tariff Act 1995. The geographic reach of this legislation is national, applying across Australia as per the provisions of the Customs Act. The application does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, nor does it impose any new liabilities on individuals or entities. The commencement date of this TCO aligns with the date the application was lodged, ensuring that any duties incurred prior to the TCO's effective date remain unaffected.
Key Provisions
The main operative sections of this legislation concern the process of applying for and receiving a Tariff Concession Order (TCO) as outlined in the Customs Act 1901 (section 269F). An applicant can request a TCO for goods if those goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the Chief Executive Officer of Customs (CEO) determines that the application meets the core criteria in section 269C, which is when no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, then the CEO must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, TCO No 0607539, made on 14 July 2006, declares that certain agricultural and/or forestry pneumatic tyres are subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO has a duty to assess whether an application meets the core criteria for a TCO, as outlined in section 269C. This involves determining if there are any substitutable goods produced in Australia that could correspond to the goods in question. The CEO must also publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission, as required by section 269K(1). Furthermore, the CEO must ensure that the TCO does not affect the rights of any person adversely as at the date of registration, nor impose any liabilities on any person in respect of anything done or omitted before the registration date, in accordance with subsection 269S(1).
In terms of breaches and consequences, the Act does not explicitly detail specific offences, penalties, or consequences for failing to comply with its provisions. However, it does state that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. There is no mention of any civil or criminal penalties for breaches, but it is implicit that non-compliance with the Act's provisions could lead to legal consequences for the parties involved.