EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704054
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.
Penrite Oil Co Pty Ltd applied for a TCO in respect of certain brake fluids on 15 March 2007.
Instrument
TCO No 0704054 was made on 05 September 2007. It declares that those certain brake fluids 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% and $0.5449/L. 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. 0704054 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 Customs Act 1901 provides for the imposition of tariffs on imported goods, but includes provisions for tariff concession orders (TCOs) to provide relief for certain goods under specific circumstances. The Tariff Concession Instrument No. 0704054 was introduced by the Commonwealth Parliament to address the issue of ensuring that tariff concessions are granted fairly and in accordance with the legislative criteria. The instrument was enacted to provide tariff concessions for certain brake fluids, applied for by Penrite Oil Co Pty Ltd, recognising that these goods were not produced in Australia and there were no substitutable goods available domestically. The primary policy objective of this instrument is to facilitate the importation of goods that are not produced in Australia, thereby benefiting importers and potentially the broader market by making such goods more competitively priced.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person who can demonstrate that certain goods they wish to import are not being produced in Australia in the ordinary course of business, thereby satisfying the core criteria for a TCO. The application process for a TCO involves submitting a request to the CEO, who must then determine if the application meets the necessary conditions, such as the absence of substitutable goods produced domestically. Once the CEO is satisfied that the application meets these criteria, they issue a TCO, effectively applying a lower rate of customs duty to the specified goods. The geographic reach of this legislation is nationwide, affecting all individuals and entities involved in the importation of goods within Australia. However, the Act excludes certain goods from eligibility for a TCO, as specified in section 269SJ. The application of this legislation can be further extended or detailed through subordinate instruments, although no such extensions are mentioned in this particular TCO.
Key Provisions
The main operative sections of this Tariff Concession Instrument No. 0704054 under the Customs Act 1901 provide for the concession of customs duty on certain brake fluids. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, they must make a TCO, as specified in section 269P(3). The particular TCO No. 0704054 declares that the certain brake fluids are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, and thus, they are exempt from the usual customs duty.
The obligations imposed by this Act on the parties it governs include the requirement for the CEO to review TCO applications and ensure they meet the core criteria set out in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. The CEO must also publish a notice in the Gazette inviting submissions from any person who might have reasons to oppose the TCO, as per subsection 269K(1). Failure to adhere to these obligations can result in legal consequences, including the potential for the TCO to be contested or overturned.
Under the Customs Act 1901, breaches of the provisions regarding TCOs can lead to various civil and criminal consequences. Although the specific offences and penalties are not detailed within this instrument, it is established that non-compliance with customs regulations can result in penalties. For instance, knowingly making a false statement or representation in an application for a TCO can lead to criminal penalties, including fines and imprisonment, as per section 269ZA of the Act. Additionally, civil penalties may apply for breaches of the Act, which can include fines up to a significant amount as prescribed by the relevant legislation. The precise penalties depend on the nature and severity of the breach.