EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613547
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.
TY Tyre Pty Ltd applied for a TCO in respect of certain mining earthmover solid cushion tyres on 16 August 2006.
Instrument
TCO No 0613547 was made on 10 November 2006. It declares that those certain mining earthmover solid cushion 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. 0613547 is taken to have come into force on 16 August 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. 0613547, enacted in 2006 under the Customs Act 1901, was introduced to address the issue of applying tariff concessions for specific goods, in this case, certain mining earthmover solid cushion tyres. The instrument was developed to facilitate the process of obtaining tariff concessions for goods where no substitutable products are produced in Australia, thereby ensuring that Australian importers are not placed at a competitive disadvantage. The instrument was created by the Chief Executive Officer of Customs, who has the authority to make such decisions under section 269F of the Customs Act 1901. The primary policy objective of this instrument is to provide tariff relief to importers, enhancing their competitiveness by reducing the customs duty on specified goods, in this instance, setting the duty for the subject tyres at zero percent.
Scope and Application
The Tariff Concession Instrument No. 0613547 under the Customs Act 1901 applies to any entity or individual seeking a tariff concession order (TCO) for specific goods, in this instance, mining earthmover solid cushion tyres. This legislation is pertinent to importers and entities involved in the importation of these particular tyres into Australia, granting them a reduced customs duty rate as stipulated by the instrument. The scope of the Act is national, operating within the framework of Australian customs law. However, the Act excludes any goods listed in section 269SJ, which specifies goods that cannot be the subject of a TCO. The application of the TCO is effective from the date the application was lodged, in this case, 16 August 2006, as per section 269S of the Act. This instrument does not affect any existing rights or impose liabilities on persons other than the Commonwealth in respect of actions taken prior to the registration date. Furthermore, the application of the TCO may be extended or modified through subordinate instruments, in line with the overarching Customs Act 1901.
Key Provisions
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) which reduce the customs duty on specified goods (s 269F). A TCO application can be submitted by any person, and if the CEO determines that the application pertains to goods that are not listed in section 269SJ of the Act, they must then assess whether the application meets the core criteria as outlined in section 269C of the Act. To meet these criteria, the goods in question must not have substitutable equivalents produced in Australia at the time the application was made (s 269C, s 269D, s 269E). If the CEO is satisfied that these criteria are met, they are required to issue a written TCO, specifying the reduced duty rate under the Customs Tariff Act 1995 (s 269P(3)). In the case of TCO No. 0613547, certain mining earthmover solid cushion tyres were declared to have a free rate of duty instead of the general rate of 5%, effective from the date the application was lodged, 16 August 2006.
The Act imposes certain obligations on the CEO in relation to TCO applications. Upon accepting an application as valid, the CEO must promptly publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be granted (s 269K(1)). This notice was published for TCO No. 0613547, but no objections were received. The CEO is also required to ensure that the TCO does not retroactively affect the rights of any person or impose liabilities on them for actions taken prior to the TCO's effective date (s 269S(1)). However, the rights of importers are positively affected, as they can apply for a refund of duty paid on the specified goods since the TCO's effective date, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences under the Act, breaches of customs legislation generally can result in fines and imprisonment. For example, under section 242 of the Customs Act, a person can be fined up to 10,000 penalty units or imprisoned for five years, or both, for offences related to false statements or documents. The maximum penalties for specific breaches would depend on the nature and severity of the offence, as outlined in the relevant sections of the Act and any associated regulations.