EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618628
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.
Road Gear Australasia Pty Ltd applied for a TCO in respect of certain automotive mats on 17 November 2006.
Instrument
TCO No 0618628 was made on 9 February 2007. It declares that those certain automotive mats 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. 0618628 is taken to have come into force on 17 November 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. 0618628 was enacted under the Customs Act 1901 to provide tariff concessions for certain goods, specifically reducing the customs duty rate to zero for automotive mats. This instrument was introduced to address the need for tariff relief in cases where goods are not produced in Australia and are not readily substitutable by domestic products. The instrument was made by the Chief Executive Officer of Customs (CEO) after determining that the application by Road Gear Australasia Pty Ltd met the core criteria set out in the Act, including the absence of substitutable goods produced in Australia. The CEO published a notice in the Gazette inviting objections to the concession, but none were received. The tariff concession is effective from the date the application was lodged, providing beneficial rights to importers who can now apply for a refund of duty on the imported goods. The instrument ensures that no existing rights of persons (other than the Commonwealth) are adversely affected by the concession.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aiming to apply lower rates of customs duty on certain goods. This mechanism is accessible to any person who can demonstrate that the goods in question are not prohibited under section 269SJ of the Act and meet the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia at the time of application. This legislative framework applies nationally, providing a uniform approach across all states and territories in Australia. The scope of the Act encompasses the entire Commonwealth, ensuring consistency in the application of customs duties. However, it excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. Additionally, the Act allows for the expansion or restriction of its application through subordinate instruments, enabling flexibility in its implementation. This legislative instrument, TCO No. 0618628, specifically addresses certain automotive mats, effectively lowering the customs duty rate from 10% to 0% for these goods, effective from the date of the application on 17 November 2006.
Key Provisions
The Tariff Concession Instrument No. 0618628, as set out in the Customs Act 1901, introduces specific provisions that govern the application and issuance of Tariff Concession Orders (TCOs) (sections 269F and 269P(3)). This instrument primarily addresses the concession of customs duty rates for certain goods, allowing for a reduced rate of duty if specific criteria are met. In this case, the instrument declares that certain automotive mats are subject to a 0% duty rate, rather than the general rate of 10%, as no substitutable goods were produced in Australia on the date the application was lodged.
The Act imposes several obligations on the Chief Executive Officer of Customs (CEO) when considering a TCO application. First, the CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs. Second, the CEO must determine whether the application meets the core criteria outlined in section 269C, specifically verifying that no substitutable goods were produced in Australia in the ordinary course of business on the application date (sections 269B and 269D). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, and consider these submissions in the decision-making process (subsection 269K(1)).
Failure to comply with the requirements and obligations under the Customs Act 1901 can result in various consequences. While the Act does not explicitly outline specific offences or penalties for breaches related to TCO applications, general provisions in the Act may apply to actions that contravene its provisions. For instance, fraudulent applications or misrepresentations could lead to penalties under the Crimes Act 1914 or other relevant legislation, including fines or imprisonment. Furthermore, if an entity fails to adhere to the terms of a TCO, they may be subject to additional duties, penalties, or forfeitures as outlined in the Customs Act and associated regulations.