EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715788
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 0715788 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. 0715788 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. 0715788 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods imported into Australia. The Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce customs duty on certain goods. In this instance, the instrument was introduced to provide relief for Western Star Trucks Australia Pty Ltd by applying a zero per cent duty rate on certain parts and accessories for road trucks, as opposed to the general rate of five per cent, thereby addressing a gap in the availability of affordable imported components for the Australian market. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby supporting industries that rely on such imports and potentially lowering costs for consumers and businesses.
Scope and Application
The Tariff Concession Instrument No. 0715788 under the Customs Act 1901 applies to individuals or entities that have applied for a Tariff Concession Order (TCO) concerning certain parts and accessories of road trucks. Specifically, this Act allows for a reduced rate of customs duty on these goods when the Chief Executive Officer of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. This concession extends to the national jurisdiction of Australia and is effective from the date the application was lodged, which in this case was 19 September 2007. The scope of this Act is limited to the specified goods mentioned in the application and does not include goods listed in section 269SJ of the Act, which are ineligible for TCOs. The instrument itself does not impose any liabilities or disadvantage any person, except for the Commonwealth, in respect of actions taken prior to its registration, and it does not require any further extensions or restrictions through subordinate instruments.
Key Provisions
The primary sections of this legislation, specifically sections 269F, 269C, and 269P(3) of the Customs Act 1901, establish the framework for Tariff Concession Orders (TCO). Section 269F outlines the process by which an individual may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. The CEO then assesses whether the application meets the core criteria as stipulated in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order, known as a TCO, as per section 269P(3), thereby applying a prescribed tariff concession to the specified goods. In this instance, the TCO No. 0715788 applies to certain parts and accessories on road trucks, reducing the duty rate from 5% to 0%.
The Customs Act 1901 imposes specific obligations on the CEO in the administration of TCOs. Once an application for a TCO is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the concession, as required by subsection 269K(1). This transparency measure ensures that all relevant stakeholders have the opportunity to voice their concerns. Additionally, the CEO is obligated to assess the application against the criteria outlined in section 269C to determine whether it qualifies for a TCO. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken prior to the TCO’s effective date, as stated in subsection 269S(1).
Failure to comply with the provisions of the Customs Act 1901 can result in various legal consequences. While the explanatory statement does not explicitly outline penalties for breaches, it is understood that non-compliance with the Act could potentially lead to legal action. For instance, if the CEO improperly grants a TCO without meeting the criteria, this could be subject to judicial review. Furthermore, any party adversely affected by the TCO could seek redress through the courts. Although specific penalties are not mentioned in the explanatory statement, breaches of customs legislation generally attract significant penalties, including fines and imprisonment, as per other sections of the Customs Act 1901.