EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615519
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.
Sperling Enterprises Pty Ltd applied for a TCO in respect of certain steering wheel locks on 6 October 2006.
Instrument
TCO No 0615519 was made on 22 December 2006. It declares that those certain steering wheel locks 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. 0615519 is taken to have come into force on 6 October 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, provides a framework for customs duties and includes a scheme for Tariff Concession Orders (TCOs) under Part XVA. This mechanism was introduced to address the need for reduced customs duties on certain imported goods where no domestic substitutes are available. The Tariff Concession Instrument No. 0615519 was made on 22 December 2006 by the Chief Executive Officer of Customs, following an application by Sperling Enterprises Pty Ltd for a TCO on certain steering wheel locks on 6 October 2006. This instrument effectively reduced the duty on these goods from 10% to 0%, subject to the core criteria being met, which included the absence of substitutable goods produced in Australia. The policy objective, as stated in the explanatory statement, is to ensure that the rights of importers are beneficially affected without imposing any new liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0615519 under the Customs Act 1901 applies specifically to entities or individuals who seek tariff concessions on certain goods. This legislation is designed for goods not produced in Australia in the ordinary course of business, where substitutable goods are not available domestically. The application of this Act is primarily focused on the eligibility and subsequent reduction of customs duties on specific items, in this case, steering wheel locks, thereby directly impacting importers of these goods. The geographic reach of this Act is national, as it pertains to the overarching Customs Act 1901, which is applicable throughout Australia. The Act excludes goods specified under section 269SJ, which are ineligible for tariff concessions. This legislation may be extended or modified through subordinate instruments such as the Customs Tariff Act 1995, which defines the tariff rates and schedules.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). According to section 269F, any individual can apply to the CEO for a TCO in respect of goods. The CEO must assess if the application complies with the core criteria specified in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that no such goods were produced, the CEO must proceed to make a TCO, as indicated in section 269P(3). This TCO declares that the goods in question are subject to a prescribed tariff item outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations under this legislation include the requirement for the CEO to assess the validity of any TCO application in accordance with the criteria specified in sections 269B, 269C, 269D, and 269E. The CEO must also publish a notice in the Gazette, as per subsection 269K(1), inviting submissions from any interested parties who may have reasons why the TCO should not be granted. The TCO itself is effective from the day the application is lodged, as per subsection 269S(1), and does not retroactively disadvantage or impose liabilities on any parties other than the Commonwealth.
The Act does not specify any offences, penalties, or civil/criminal consequences for breaches related to the TCO process itself. However, any subsequent misuse or fraudulent activities related to the concession, such as claiming benefits without meeting the TCO criteria, could potentially lead to penalties under other sections of the Customs Act 1901 or related legislation. The general implication is that if the conditions for a TCO are not met, the concession does not apply, and the standard tariff rates would be enforced.