EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610570
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.
Gav Sport Braking Solutions applied for a TCO in respect of certain V8 racing cars brake pads on 19 June 2006.
Instrument
TCO No 0610570 was made on 01 September 2006. It declares that those certain V8 racing cars brake pads 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. 0610570 is taken to have come into force on 19 June 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 Parliament of Australia, provides for the regulation of customs and excise duties. This legislation was introduced to address the need for a systematic approach to the reduction or exemption of customs duties on specific imported goods under certain conditions. One such mechanism is the Tariff Concession Order (TCO), which can be applied for by interested parties and granted by the Chief Executive Officer of Customs (CEO) if certain criteria are met. Specifically, TCOs can be made when the goods in question are not substitutable by Australian-produced goods, thus ensuring that local industries are not unfairly disadvantaged. The policy objective behind the TCO scheme is to promote competitive and fair trade practices by providing tariff relief on imported goods that are not domestically produced.
Tariff Concession Instrument No. 0610570 was made under this legislative framework on 1 September 2006, following an application by Gav Sport Braking Solutions for tariff concessions on certain V8 racing cars brake pads. The CEO determined that no substitutable goods were produced in Australia and, therefore, the application met the core criteria set out in the Customs Act 1901. This instrument provides for a rate of duty of free on these specific brake pads, whereas the general rate of duty would have been 5%. The TCO came into force on 19 June 2006, the date on which the application was lodged, and it does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0610570 under the Customs Act 1901 applies specifically to certain V8 racing cars brake pads, providing a concession on the customs duty for these goods. This Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) that reduce the rate of customs duty on goods if certain criteria are met, namely that no substitutable goods are produced in Australia in the ordinary course of business. This legislation is designed to benefit importers by reducing their duty costs on these specific racing car components, thereby potentially making them more competitive in the market. The TCO does not affect any pre-existing rights or impose any liabilities on any person other than the Commonwealth, ensuring that existing transactions are not disadvantaged. This instrument applies nationally across Australia, aligning with the broader aims of the Customs Act 1901 and the Customs Tariff Act 1995, which together govern the regulation of customs duties.
Key Provisions
The main operative sections of this Tariff Concession Instrument are sections 269F, 269C, and 269P(3) of the Customs Act 1901. Section 269F permits an application for a Tariff Concession Order (TCO) in respect of goods. Section 269C provides the core criteria for determining whether a TCO application meets the necessary conditions, specifically that no substitutable goods were produced in Australia on the day the application was lodged. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, section 269P(3) requires the CEO to make a written TCO, specifying the applicable rate of duty as free.
The Customs Act 1901 imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ, which outlines goods that cannot be subject to a TCO. The CEO also has a duty to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Furthermore, the CEO must determine whether the application meets the core criteria by verifying that no substitutable goods were produced in Australia. If the criteria are met, the CEO must issue the TCO in writing, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995.
In terms of consequences for breach, the Act does not specify any direct criminal or civil penalties for failing to comply with the provisions of a TCO. However, any failure to adhere to the conditions set out in the TCO could potentially lead to complications with customs duty assessments and refunds. The Act ensures that the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person for actions taken before the date of registration. Importers will benefit from being able to apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.