EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616186
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.
Robert Bosch (Australia) Pty Ltd applied for a TCO in respect of certain throttle body housings on 28 August 2006.
Instrument
TCO No 0616186 was made on 24 November 2006. It declares that those certain throttle body housings 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. 0616186 is taken to have come into force on 28 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. 0616186 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced in Australia and for which there are no substitutable goods available in the domestic market. This instrument was introduced to facilitate the application process for tariff concession orders (TCOs), which can lower the customs duty rates for certain imported goods. The instrument was enacted by the Chief Executive Officer of Customs, who is responsible for determining whether an application for a TCO meets the core criteria set out in the Act. The policy objective of this legislation is to provide relief to importers by reducing the duty rates on goods that are not produced domestically and cannot be substituted with locally produced alternatives. This, in turn, aims to benefit the rights of importers who can now apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0616186, made under the Customs Act 1901, applies to the specific goods of throttle body housings for which Robert Bosch (Australia) Pty Ltd made an application for a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs to grant TCOs, which lower the rate of customs duty for certain goods provided that no substitutable goods are produced in Australia in the ordinary course of business. The TCO applies nationally, affecting all importers of the specified goods, and it does not disadvantage any person other than the Commonwealth. It specifically benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect on 28 August 2006. The CEO was satisfied that no substitutable goods were produced in Australia for these throttle body housings, resulting in a duty rate of 0% under item 50 of Schedule 4 to the Customs Tariff Act 1995, down from the general rate of 5%. The application process required the CEO to publish a notice in the Gazette inviting submissions, though none were received, which facilitated the making of the TCO.
Key Provisions
The primary sections relevant to Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C) stipulate that a TCO can be made if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are being produced in Australia in the ordinary course of business. If this condition is met, the CEO must issue a written TCO (section 269P(3)). The legislation also mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made (subsection 269K(1)). The TCO itself becomes effective on the date the application is lodged (subsection 269S(1)).
The obligations imposed by this Act require applicants to ensure that their applications meet the core criteria, which includes proving that no substitutable goods are being produced in Australia. The CEO must verify this information before making a TCO, and they are also obligated to publish a notice in the Gazette and consider any submissions received in response to the invitation. The TCO, once issued, is binding and provides tariff concessions to the specified goods, effectively reducing the customs duty on these items.
Failing to comply with the requirements of this Act can lead to various legal consequences. If a TCO is issued improperly, it can be challenged in court, potentially leading to the TCO being overturned. Additionally, if the CEO does not follow the mandated procedures, such as failing to publish a notice in the Gazette, they may face administrative penalties. The penalties for non-compliance are not explicitly stated in the text, but they could include fines or other administrative sanctions.
The Tariff Concession Instrument No. 0616186 provides specific relief for certain throttle body housings, reducing the duty from 5% to 0%. This concession applies from the date the application was lodged, 28 August 2006, and benefits importers by potentially allowing them to claim a refund of duty paid on imports since that date (paragraph 126(1)(r) of the Regulations). It is crucial that all parties adhere to the stipulated procedures and conditions to ensure the validity and effectiveness of the TCO.