EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715229
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.
Western Star Trucks Australia Pty Ltd applied for a TCO in respect of certain on road trucks parts and accessories on 17 October 2007.
Instrument
TCO No 0715229 was made on 14 December 2007. It declares that those certain on road trucks parts and accessories 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 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. 0715229 is taken to have come into force on 17 October 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 Parliament of Australia, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument was designed to address the need for streamlined tariff processes for specific goods, particularly those that are not produced domestically and for which tariff concessions could be beneficial to the economy or specific industries. The policy objective behind this mechanism is to provide relief from customs duties on certain imported goods, thereby potentially lowering costs and increasing competitiveness for businesses reliant on these imports. TCO No. 0715229, enacted in response to an application by Western Star Trucks Australia Pty Ltd, exemplifies this by providing a duty-free rate for certain on-road truck parts and accessories, which were previously subject to a 10% duty rate. This specific instrument was introduced to ensure that the Australian market remains competitive and accessible to essential imports, while also encouraging domestic production where feasible.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0715229, applies to goods specified in the instrument, namely certain on-road truck parts and accessories. The Act is a Commonwealth legislation and therefore has a national jurisdictional reach. The instrument allows for a lower rate of customs duty on these specified goods, with the general rate of duty being reduced from 10% to free, provided that the application meets the core criteria set out in section 269C of the Act. This involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The instrument was made on 14 December 2007 and came into effect on 17 October 2007, the date the application was lodged. The application process includes publishing a notice in the Gazette to invite any submissions from interested parties, although in this instance, no submissions were received. The application of this tariff concession does not disadvantage or impose liabilities on any person in respect of actions taken prior to the instrument's registration.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0715229 under the Customs Act 1901, concern the establishment and application of Tariff Concession Orders (TCOs) for certain goods. Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for TCOs in respect of goods, subject to certain exclusions outlined in section 269SJ. The CEO must determine if the application meets the core criteria specified in section 269C, which includes verifying that no substitutable goods are produced in Australia at the time of application, as defined in sections 269D and 269E. If the application meets these criteria, a TCO is issued under section 269P(3), which declares the goods eligible for a reduced rate of customs duty, as specified in Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by this legislation are primarily on the CEO and the applicants. The CEO must assess the validity of TCO applications and ensure they meet the core criteria before issuing a TCO. This involves verifying that no substitutable goods are being produced in Australia at the time of the application. Applicants for a TCO must provide sufficient information to allow the CEO to make this determination. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit objections if they believe the TCO should not be granted. In this instance, no submissions were received, allowing the TCO to proceed without opposition.
Offences and penalties under this legislation are not explicitly detailed in the provided text, but generally, failure to comply with the requirements of a TCO could lead to civil or criminal consequences. For example, incorrectly claiming tariff concessions could result in fines or other penalties as outlined in the Customs Act 1901 or associated regulations. While specific maximum penalties are not stated in the text, breaches of customs regulations typically incur significant fines and potential legal action under Australian law. It is also possible that the failure to adhere to the terms of a TCO could result in the revocation of the concession or other administrative penalties.