EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715785
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 and accessories on road trucks on 19 September 2007.
Instrument
TCO No 0715785 was made on 10 December 2007. It declares that those certain parts and accessories 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. 0715785 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, as supplemented by the Tariff Concession Instrument No. 0715785, was enacted to address the need for tariff concessions for specific goods that are not produced in Australia, thereby providing relief to importers and ensuring a level playing field for Australian industries. This instrument was introduced by the Chief Executive Officer of Customs in response to an application by Western Star Trucks Australia Pty Ltd for tariff concessions on certain parts and accessories for road trucks, which were not produced in Australia at the time. The instrument aims to reduce the customs duty on these specific goods from the general rate of 5% to 0%, aligning with the policy objective of facilitating trade and supporting businesses that rely on imported components.
The instrument was developed and enacted by the Parliament of Australia, ensuring that the tariff concession scheme is consistent with broader legislative objectives and economic policies. By reducing the customs duty, the instrument seeks to enhance the competitiveness of businesses that use these imported parts and accessories, while also providing a benefit to importers who can now import these goods at a lower duty rate. The instrument came into effect on 19 September 2007, the date on which the application was lodged, and does not affect any existing rights or impose new liabilities on parties other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0715785, made under the Customs Act 1901, applies to the specific parts and accessories of road trucks for which Western Star Trucks Australia Pty Ltd made an application on 19 September 2007. The instrument was issued after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The instrument establishes that these particular goods are subject to a 0% duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the general rate of 5%. The instrument is effective from the date of the application, 19 September 2007, and does not affect any pre-existing rights or liabilities of any person except the Commonwealth. Importers of these goods can apply for a refund of duty paid since the commencement date. The instrument does not specify exclusions or exemptions other than those outlined in section 269SJ of the Customs Act 1901, which prohibits certain goods from being subject to a TCO. Any subordinate instruments that may extend or restrict the application of this TCO would be made in accordance with the provisions of the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0715785 under the Customs Act 1901 (sections 269C, 269P(3), and 269S) establish the criteria for the Chief Executive Officer (CEO) of Customs to consider when deciding whether to grant a Tariff Concession Order (TCO) for specific goods. Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a TCO (section 269P(3)), which declares that the goods are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. In this instance, the CEO granted a TCO for certain parts and accessories on road trucks, applying a 0% duty rate instead of the general 5% rate.
The obligations imposed by the Act on the parties involved include the requirement for applicants to submit a valid TCO application to the CEO (section 269F), who must then determine whether the application meets the core criteria (section 269C). If satisfied, the CEO must make a written TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, if any exist (section 269K(1)). Western Star Trucks Australia Pty Ltd fulfilled its obligation by applying for the TCO on 19 September 2007. The CEO, after reviewing the application, determined that the core criteria were met and subsequently issued the TCO on 10 December 2007.
Breaching the provisions of the Customs Act 1901 that govern TCOs can lead to various civil or criminal consequences. Under the Act, offences related to the improper application or fraudulent use of TCOs can be prosecuted. Penalties for such offences may include fines and imprisonment, depending on the severity of the breach. The maximum penalties are determined by the specific nature of the offence and the provisions of the relevant legislation. For instance, under the Crimes Act 1914, a person who knowingly makes a false statement in a document required by the Customs Act can be subject to a penalty of up to two years imprisonment. Similarly, the maximum penalty for defrauding the Commonwealth in relation to customs duty can be up to ten years imprisonment, as stipulated in the Criminal Code Act 1995. The Act ensures that any misuse or fraudulent activity concerning TCOs is subject to stringent penalties to uphold the integrity of the customs duty system.