EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715402
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 trucks parts and accessories on 19 September 2007.
Instrument
TCO No 0715402 was made on 14 December 2007. It declares that those certain 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 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. 0715402 is taken to have come into force on 19 September 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, established a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act addresses the gap in providing tariff concessions for certain goods not produced domestically, thereby encouraging the importation of specific items. This legislative measure aims to ensure that Australian consumers and businesses have access to a broader range of goods at potentially lower costs. Western Star Trucks Australia Pty Ltd applied for a TCO concerning certain truck parts and accessories, leading to the issuance of TCO No. 0715402 on 14 December 2007. This instrument grants tariff concessions for these goods, setting their duty rate at free, compared to the general rate of 5%. The policy objective is to benefit importers by potentially reducing the duty on these goods, which were not being produced in Australia at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 0715402, made under the Customs Act 1901, applies specifically to certain truck parts and accessories for which Western Star Trucks Australia Pty Ltd submitted an application on 19 September 2007. This instrument grants tariff concessions by declaring these goods to be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate from 5% to free. The application of this Instrument is limited to the goods specified in the application and is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods were produced in Australia at the time the application was lodged. The instrument's jurisdictional reach is federal, operating under the Commonwealth of Australia, and its application does not extend to disadvantage any person or impose liabilities on anyone other than the Commonwealth. The instrument became effective on the date the application was lodged, 19 September 2007, and importers of these goods may apply for a refund of duty paid on imports since that date. There were no submissions received in response to the notice published in the Gazette inviting objections to the TCO.
Key Provisions
The primary sections of the legislation in question are sections 269C, 269B, 269D, 269E, 269P(3), and 269SJ of the Customs Act 1901. Section 269C sets out the criteria for a Tariff Concession Order (TCO), requiring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B explains the terms used in section 269C, such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". Section 269D and 269E provide definitions for these terms, ensuring clarity in the application process. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written order declaring the goods subject to the TCO must be made. Section 269SJ outlines the goods that cannot be subject to a TCO. The application process, as stipulated in these sections, ensures that only appropriate goods receive tariff concessions.
The obligations imposed by the Act on parties and entities include the requirement for applicants to ensure that their applications meet the core criteria set out in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The Chief Executive Officer of Customs (CEO) is obligated to decide whether an application meets the criteria and to make a TCO if satisfied. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made, as per subsection 269K(1). The Act also imposes a responsibility on the CEO to ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person in respect of actions taken before the date of registration.
Breach of the obligations set out in the Customs Act 1901 can lead to several consequences. While the explanatory statement does not detail specific offences or penalties, it is implicit that failure to comply with the Act’s provisions could result in legal ramifications. For example, any person who submits an application that does not meet the core criteria or provides misleading information could face penalties. The CEO, on the other hand, must ensure that the TCO process is followed correctly; failure to do so might result in the order being contested or annulled in court. Although the maximum penalties are not specified in the explanatory statement, breaches of customs regulations generally attract fines and potential imprisonment under the broader customs legislation.