EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704025
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.
Siemens VDO Automotive Pty Ltd applied for a TCO in respect of certain automotive manifold tuning valves on 15 March 2007.
Instrument
TCO No 0704025 was made on 8 June 2007. It declares that those certain automotive manifold tuning valves 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. 0704025 is taken to have come into force on 15 March 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. 0704025 was enacted in 2007 as part of the Customs Act 1901, aiming to address the issue of applying tariff concessions to specific goods by providing a mechanism through which applications for Tariff Concession Orders (TCOs) can be processed and granted by the Chief Executive Officer of Customs. The instrument was introduced to streamline the process for businesses seeking to import certain goods at a lower rate of customs duty, provided that no substitutable goods are produced in Australia and the application meets the core criteria specified in the Act. The policy objective is to facilitate trade by reducing the customs duty on eligible imported goods, thereby potentially lowering costs for businesses and consumers alike.
The instrument was enacted by the Parliament of Australia and provides a framework for the CEO to assess applications for TCOs and make decisions based on whether the goods in question are substitutable by domestically produced alternatives. In the case of Siemens VDO Automotive Pty Ltd’s application for certain automotive manifold tuning valves, the CEO determined that no such substitutable goods were produced in Australia, leading to the issuance of TCO No. 0704025. This order effectively reduced the duty on these specific goods from 5% to 0%, effective from the date the application was lodged, 15 March 2007.
Scope and Application
The Tariff Concession Instrument No. 0704025 is part of the Customs Act 1901, which applies to the whole of Australia and encompasses various industries and entities involved in the importation of goods. This particular instrument focuses on the application of Tariff Concession Orders (TCOs) for specific goods, in this instance, certain automotive manifold tuning valves, by reducing the customs duty on these goods from the general rate of 5% to 0%. The instrument applies to the entity that made the application, Siemens VDO Automotive Pty Ltd, as well as to any other importers of these goods. The geographic reach of the Act and the instrument is national, as it applies to the entirety of Australia. The Act excludes certain goods from being subject to a TCO, as specified in section 269SJ of the Customs Act 1901, ensuring that only those goods that meet the core criteria outlined in section 269C are eligible for a TCO. The application of the Act may be extended or restricted through subordinate instruments, allowing for flexibility in the administration and enforcement of tariff concessions for various goods.
Key Provisions
The Customs Act 1901 (the Act) includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced customs duty rates on certain goods (s 269F). Specifically, Section 269C outlines the core criteria that must be met for a TCO application to be approved: the goods in question must not have any substitutable equivalents produced in Australia on the day the application was lodged (s 269C). The definitions of 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are provided in Sections 269D, 269E, and 269P(3) respectively. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO (s 269P(3)).
For Siemens VDO Automotive Pty Ltd's application concerning automotive manifold tuning valves, the CEO issued TCO No. 0704025 on 8 June 2007, effective from 15 March 2007 (s 269S(1)). This TCO specifies that these valves are subject to a 0% duty rate instead of the general 5% rate (Schedule 4, item 50). The CEO published a notice in the Gazette inviting submissions against the TCO but did not receive any (s 269K(1)).
The obligations under this legislation for the CEO include ensuring that any TCO application does not involve goods that are or could be produced in Australia and that they notify the public of any valid applications by publishing a notice in the Gazette (s 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on such persons (s 126(1)(r)).
In the event of non-compliance with the requirements set out in the Customs Act 1901, the Act does not specify particular offences or penalties for breaches of TCO provisions. However, any failure to adhere to the conditions outlined in the TCO or other related obligations could potentially lead to legal action or administrative consequences. The specific nature and extent of these consequences would depend on the details of the breach and the applicable laws at the time.