EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715787
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 road trucks parts on 19 September 2007.
Instrument
TCO No 0715787 was made on 04 December2007. It declares that those certain road trucks parts 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. 0715787 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. 0715787, enacted in 2007, is an instrument under the Customs Act 1901, designed to facilitate tariff concessions for certain road truck parts. This legislation was introduced to address the problem of potentially high customs duties on specific imported goods, thereby encouraging trade and economic activity by lowering the cost of these goods. The Customs Act 1901, enacted by the Commonwealth Parliament, provides the framework for customs duties and tariff concessions, with the Chief Executive Officer of Customs being the authority responsible for making Tariff Concession Orders (TCOs). The policy objective of this instrument is to ensure that imported goods, in this case specific road truck parts, are subject to lower customs duties, thus making them more affordable and competitive in the Australian market. This approach aligns with broader economic policies aimed at fostering trade and industry growth by reducing the financial burden on businesses and consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) that provide a lower rate of customs duty on specified goods. This process is applicable to any person or entity that applies for such a concession, provided that the goods in question are not specified as ineligible under section 269SJ of the Act. The application must meet the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business at the time of application, as per sections 269C and 269D of the Act. Once the CEO determines that the application meets these criteria, a TCO is issued, effectively altering the duty rate for the specified goods, as illustrated in TCO No 0715787 made on 4 December 2007. This instrument applies to certain road truck parts, setting their duty rate to free, as opposed to the general rate of 10%. The Act ensures that the issuance of TCOs does not disadvantage any existing rights of parties or impose new liabilities, with specific provisions for duty refunds under the Regulations for importers of the affected goods.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) in this context are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). Section 269C stipulates that a TCO 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 defines "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written TCO order. Section 269SJ lists the goods that cannot be subject to a TCO.
The Act imposes several obligations on the parties involved. Firstly, the CEO must decide whether a TCO application meets the core criteria, as outlined in section 269C. The CEO must also publish a notice in the Gazette inviting any submissions from persons who believe the TCO should not be made, as per subsection 269K(1). Importers of the goods subject to the TCO may apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the Act for breach of the TCO provisions. However, the Act ensures that 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 in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force.