EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615141
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 trailer lamps on 27 September 2006.
Instrument
TCO No 0615141 was made on 8 December 2006. It declares that those certain trailer lamps 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 10%. 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. 0615141 is taken to have come into force on 27 September 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. 0615141 was enacted under the Customs Act 1901, which provides a framework for granting tariff concessions on certain goods. The primary issue this legislation aimed to address was the facilitation of trade by reducing customs duty on specified goods, thus encouraging their importation and use within Australia. This instrument was introduced to streamline the process of applying for tariff concessions and ensure that such applications are thoroughly reviewed by the Chief Executive Officer of Customs, who is responsible for determining whether the core criteria for concession eligibility are met. The policy objective is to support the importation of goods that are not locally produced, thereby enhancing the availability and affordability of these goods in the Australian market.
The instrument was created following an application by Super Cheap Auto Pty Ltd for tariff concessions on certain trailer lamps, which was approved after it was determined that no substitutable goods were produced in Australia. This decision led to the issuance of Tariff Concession Order No. 0615141, which reduces the customs duty on these trailer lamps from 10% to 0%. The process involved publishing a notice in the Gazette to invite any objections, which none were received, ensuring a transparent and inclusive decision-making process. The concession came into effect on the date the application was lodged, 27 September 2006, without retroactively affecting the rights of any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which can be issued by the Chief Executive Officer of Customs. These TCOs allow for a lower rate of customs duty on certain goods. The legislation applies to any person or entity that applies for a TCO in respect of goods that are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The Act operates on a national level across Australia and applies to all states and territories within the Commonwealth. Exclusions from the application of a TCO are limited to goods specified in section 269SJ, and any application that does not meet the core criteria specified in sections 269C, 269D, and 269E will not be granted. Subordinate instruments may further refine or expand the application of the TCOs, although no such instruments are indicated in this particular case. The Tariff Concession Instrument No. 0615141, effective from 27 September 2006, reduced the duty on certain trailer lamps from 10% to 0% after determining that no substitutable goods were produced in Australia.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (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. Section 269C sets out the core criteria that a TCO application must meet, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) as specified in section 269P(3). The TCO then declares 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 applies, thus reducing the rate of customs duty.
The obligations imposed by the Act on parties or entities it governs include the requirement for the CEO to assess whether a TCO application meets the core criteria. This involves determining whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO must 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. In the case of TCO No. 0615141, the CEO published a notice and received no submissions, which facilitated the making of the order.
The Act also imposes specific consequences for breaches of its provisions. While the explanatory statement does not detail specific criminal or civil penalties for non-compliance with TCOs, general penalties for breaches of the Customs Act may include fines and imprisonment. The maximum penalties for serious breaches can be significant, reflecting the importance of compliance with customs regulations. It is important to note that the rights of persons other than the Commonwealth are protected, and the TCO does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. This ensures that the TCO does not disadvantage any person or impose liabilities retroactively.