EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715403
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 parts on road trucks on 19 September 2007.
Instrument
TCO No 0715403 was made on 10 December 2007. It declares that those certain parts on road trucks 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. 0715403 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 Tariff Concession Instrument No. 0715403 was enacted in 2007 as part of the Customs Act 1901 to address the need for tariff concessions for specific goods, in this case certain parts of road trucks, where no substitutable goods are produced in Australia in the ordinary course of business. This instrument facilitates the application of a lower rate of customs duty on these specified goods, thereby encouraging their importation and potentially stimulating economic activity related to their use. The Customs Act 1901, enacted by the Parliament of Australia, provides the framework for such tariff concessions through Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs upon meeting specified criteria. The primary objective of this legislation is to ensure that the importation of these goods is facilitated without imposing additional burdens or liabilities on importers, while also protecting the interests of the Commonwealth. The process involves public consultation, as outlined in section 269K(1) of the Act, although in this instance, no submissions were received in response to the published notice.
Scope and Application
The Tariff Concession Instrument No. 0715403 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO), in this instance, certain parts of on-road trucks. The application for a TCO was submitted by Western Star Trucks Australia Pty Ltd on 19 September 2007, and the instrument was made on 10 December 2007 by the Chief Executive Officer of Customs (CEO) after determining that no substitutable goods were produced in Australia at the time of the application. This determination led to the declaration that the specified parts on-road trucks are subject to a 0% duty rate, down from the general rate of 5%. The Act applies to any person or entity that imports these particular goods into Australia, granting them a tariff concession as long as they comply with the conditions set out in the TCO. The scope of the legislation is national, as it operates under the Commonwealth’s authority, and it does not impose any liabilities on persons other than the Commonwealth. Any importer of the specified goods can apply for a refund of duties paid since the TCO was deemed to have come into effect on 19 September 2007. The Act’s provisions allow for the CEO to make TCOs subject to certain criteria, which can be further detailed through subordinate instruments.
Key Provisions
The main operative sections of this legislation, under Part XVA of the Customs Act 1901, include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, provided these goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, meaning no substitutable goods were produced in Australia on the day the application was lodged, a TCO can be issued. This TCO, as per section 269P(3), declares that the goods in question are subject to a prescribed tariff rate in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess the validity of any TCO application against the criteria set forth in sections 269C, 269B, and 269D. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the TCO, as per section 269K(1). The CEO's decision to issue a TCO must be based on a thorough evaluation of the application and any relevant submissions received, ensuring that the concession does not disadvantage any party or impose liabilities for actions taken prior to the TCO's effective date.
In terms of consequences for non-compliance, the Act does not explicitly detail specific offences or penalties for breaches related to the issuance or misuse of TCOs. However, the Act's broader framework suggests that any misuse or improper application of TCOs could potentially lead to civil or administrative penalties. Such penalties would likely be in line with other customs-related infractions under the Customs Act 1901, which may include fines or other sanctions deemed appropriate by the courts or relevant authorities. The specifics of any penalties would be determined based on the nature and severity of the breach, in accordance with Australian law.