EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615796
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.
Man Automotive Imports Pty Ltd applied for a TCO in respect of certain truck chassis on 13 October 2006.
Instrument
TCO No 0615796 was made on 22 December 2006. It declares that those certain truck chassis 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 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. 0615796 is taken to have come into force on 13 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties. It includes the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. Enacted to address the need for flexible tariff arrangements that can accommodate specific economic circumstances, this legislation enables the CEO to consider applications for tariff concessions where certain conditions are met. One such condition, outlined in section 269C, requires that no substitutable goods are produced in Australia. The policy objective is to facilitate trade by reducing the cost of imported goods, thereby supporting economic activities that rely on these imports. This particular TCO, Instrument No. 0615796, was made in response to an application from Man Automotive Imports Pty Ltd for certain truck chassis, which was accepted by the CEO, leading to a reduction in duty rates from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0615796, made under the Customs Act 1901, applies to certain truck chassis imported by Man Automotive Imports Pty Ltd, effective from the date the application was lodged on 13 October 2006. This instrument, which was made on 22 December 2006, provides a concession by reducing the customs duty rate from 5% to 0% for the specified goods. The Act applies to any person or entity that imports the designated goods, and the concession is available for goods imported from the date the application was lodged, irrespective of when the instrument was formally made. The scope of this Act extends to the Commonwealth jurisdiction and applies nationally, as per the provisions of the Customs Act 1901. There are specific exclusions as outlined in section 269SJ of the Act, which lists goods that cannot be subject to a Tariff Concession Order. Additionally, the Act allows for further specification and modification of its application through subordinate instruments, ensuring flexibility in its administration and enforcement.
Key Provisions
The Tariff Concession Order (TCO) No. 0615796 under the Customs Act 1901 (the Act) applies a zero rate of customs duty to certain truck chassis. This is a significant reduction from the general duty rate of 5% (s. 269F). To qualify for this concession, the application must meet core criteria as outlined in section 269C, which requires that no substitutable goods were produced in Australia on the date the application was lodged (s. 269C). The definitions of key terms such as 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are provided in sections 269D, 269E, and 269F of the Act respectively.
The obligations imposed by the Act on parties applying for a TCO include submitting an application to the Chief Executive Officer of Customs (the CEO) and ensuring that the application meets the core criteria. The CEO is required to make a decision on the application based on whether the core criteria are met, and if so, to issue a written order in the form of a TCO (s. 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this case, no submissions were received (s. 269K(1)).
Failure to comply with the requirements of the Act or the terms of a TCO may result in legal consequences. While the explanatory statement does not detail specific offences or penalties for breaching the Act, general provisions of the Customs Act 1901 provide for various penalties, including fines and imprisonment, for non-compliance with customs laws. The exact penalties would depend on the nature and severity of the breach. Additionally, the Tariff Concession Instrument No. 0615796 itself does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth.