EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702888
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.
GUD Automotive Pty Ltd applied for a TCO in respect of certain automotive cabin air filters on 23 February 2007.
Instrument
TCO No 0702888 was made on 21 May 2007. It declares that those certain automotive cabin air filters 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 free.
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. 0702888 is taken to have come into force on 23 February 2007.
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. 0702888 was enacted in 2007 under the Customs Act 1901 to address the issue of providing tariff concessions for specific goods. This instrument was introduced to streamline the process for granting tariff concessions on certain automotive cabin air filters, ensuring that such concessions are applied efficiently and without creating undue burdens on the import process. The instrument was developed by the Chief Executive Officer of Customs (CEO) in response to an application from GUD Automotive Pty Ltd, aiming to reduce the customs duty on these goods from 5% to free, subject to the CEO's satisfaction that no substitutable goods were produced in Australia. The objective of this measure is to support the import and use of these specific goods in the Australian market, benefiting importers by potentially allowing them to claim refunds of duty for goods imported since the TCO was taken to have come into force.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs, facilitating tariff concessions on specified goods. This Act applies to any person who may apply to the CEO for a TCO in respect of goods, provided that the goods do not fall under the categories specified in section 269SJ of the Act which are ineligible for tariff concessions. The Act extends to the entire Commonwealth of Australia, influencing trade and import duties across the nation. Exclusions are clearly defined, and the Act does not affect the rights of any person adversely if the TCO is applied retrospectively from the date the application was lodged. The scope of the Act can be further extended or modified through subordinate instruments such as regulations or subsidiary legislation, which can specify additional criteria or details regarding the application and implementation of TCOs.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0702888 (sections 269C, 269P, and 269S) establish the framework for the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269C specifies the core criteria that an application for a TCO must meet, namely that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer of Customs (CEO) must make a written TCO order, declaring that the goods in question are subject to a prescribed rate of duty under the Customs Tariff Act 1995. Section 269S outlines the commencement of the TCO, which is effective from the day the application is lodged. This instrument was specifically applied to automotive cabin air filters by GUD Automotive Pty Ltd, resulting in Instrument TCO No. 0702888, which took effect on 23 February 2007.
The obligations imposed by the Act on the parties involved, particularly GUD Automotive Pty Ltd, include ensuring that their application for a TCO meets the stipulated core criteria, specifically that no substitutable goods are produced in Australia at the time of application. The CEO has the obligation to review the application, determine whether it meets the criteria, and if satisfied, to issue a written TCO order. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be granted, although no submissions were received in this instance.
Under the Customs Act 1901, failure to comply with the requirements set out for TCO applications may result in the CEO refusing to grant a TCO. However, the explanatory statement does not specify any criminal or civil penalties for non-compliance with the Act's provisions in this context. It is worth noting that while the explanatory statement does not explicitly mention penalties for breach, general provisions of the Customs Act 1901 may apply, which could include fines or imprisonment for more severe breaches related to customs and excise duties. The specific penalties would depend on the nature and severity of the breach as outlined in other relevant sections of the Act.