EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713225
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.
Autoliv Australia Pty Ltd applied for a TCO in respect of a certain airbag assembly line on 20 August 2007.
Instrument
TCO No 0713225 was made on 02 November 2007. It declares that those certain airbag assembly lines 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. 0713225 is taken to have come into force on 20 August 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, enacted by the Australian Parliament, provides a framework for the regulation of customs and excise within Australia, including the ability to apply for tariff concession orders (TCOs) under Part XVA. This part of the Act was introduced to address the need for tariff concessions on specific goods, allowing for reduced customs duty rates where appropriate. This process is overseen by the Chief Executive Officer of Customs (CEO) who evaluates applications against the core criteria outlined in the Act. In the case of Tariff Concession Instrument No. 0713225, the CEO determined that a lower rate of duty should apply to certain airbag assembly lines, effective from 20 August 2007, due to the absence of substitutable goods produced in Australia at the time of the application. This decision was made in accordance with the policy objective of ensuring fair and competitive market practices while also considering the potential economic benefits for the relevant industry.
Scope and Application
The Tariff Concession Instrument No. 0713225 under the Customs Act 1901 applies to individuals or entities that are seeking tariff concessions on specific goods, in this case, airbag assembly lines, as applied for by Autoliv Australia Pty Ltd. This Act operates on a Commonwealth level, governing the application process for tariff concessions, and it applies to those goods that meet the core criteria specified under sections 269C and 269D of the Act. The application process involves an assessment by the Chief Executive Officer of Customs to determine if the goods are not substitutable by any produced in Australia and if the application aligns with the legislative framework. Notably, the instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken before the instrument's registration. The instrument extends its application through subordinate instruments, which include the Customs Tariff Act 1995 and related regulations, to provide a comprehensive framework for tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) concerning Tariff Concession Orders (TCOs) are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in sections 269C and 269B, a TCO can be made. Specifically, section 269C states that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B further defines key terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’. If the CEO is satisfied that the application meets these criteria, they must make a written TCO, as stipulated in section 269P(3).
The Act imposes certain obligations and requirements on the parties involved. For example, the CEO must ensure that the application does not pertain to goods specified in section 269SJ, which lists goods ineligible for a TCO. The CEO is also required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their concerns. The TCO itself does not affect the rights of any person, except the Commonwealth, as at the date of registration and does not impose liabilities on any person for actions taken before the date of registration. Importers, however, will benefit from the TCO as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
The Act also delineates the offences, penalties, or civil/criminal consequences for breach. However, the explanatory statement does not specify maximum penalties or particular offences related to the issuance or misuse of TCOs. The focus appears to be more on the procedural aspects and the relief provided to certain importers, rather than on punitive measures. The TCOs are designed to benefit specific industries by reducing the customs duty, provided the goods are not substitutable and not produced in Australia in the ordinary course of business. Any breach of the requirements or misuse of the TCO would likely be subject to general legal consequences under the Customs Act and associated regulations.