EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717749
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 on road trucks steering parts on 17 October 2007.
Instrument
TCO No 0717749 was made on 18 January 2008. It declares that those certain on road trucks steering 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 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. 0717749 is taken to have come into force on 17 October 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 Parliament of Australia, establishes a framework within which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This was introduced to address the gap in providing tariff concessions to certain goods, thereby encouraging trade and supporting industry. The instrument in question, Tariff Concession Instrument No. 0717749, was issued on 18 January 2008, following an application by Western Star Trucks Australia Pty Ltd for tariff concessions on certain on-road truck steering parts. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. As a result, a TCO was issued, declaring that the specified steering parts are subject to a 0% duty rate, down from the general rate of 5%. This concession is designed to benefit importers of these goods, allowing them to apply for refunds of duty paid on imports since the TCO's effective date of 17 October 2007.
Scope and Application
The Customs Act 1901, as amended, includes provisions for the making of Tariff Concession Orders (TCO) under Part XVA, which allow for the application of lower rates of customs duty on specified goods. The Act applies to any person or entity that seeks to import goods eligible for a tariff concession, subject to the conditions and criteria outlined in the Act. The application process involves submitting a request to the Chief Executive Officer of Customs (CEO) for a TCO, with the CEO required to determine if the application meets the core criteria, primarily focusing on whether substitutable goods are produced in Australia. The CEO’s decision to grant a TCO is effective from the date the application is lodged, as stipulated by the Act. This legislation extends its application across Australia, affecting all importers and entities involved in the importation of goods that are subject to tariff concessions. Notably, the Act excludes certain goods from being eligible for a TCO, as specified in section 269SJ. The scope of the Act can be further refined or extended through subordinate instruments, which may include regulations or further explanatory statements detailing specific conditions or criteria for particular industries or types of goods.
Key Provisions
The Tariff Concession Instrument No. 0717749 is a specific legislative instrument under the Customs Act 1901, which governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows for applications to be made for TCOs, and if the CEO is satisfied that the application meets certain criteria, they are required to make a written order. Specifically, section 269C states 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. The instrument in question, TCO No. 0717749, was made on 18 January 2008, and it pertains to certain on-road trucks steering parts, reducing the duty on these goods from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that their application is valid and meets the core criteria as outlined in section 269C. The CEO has a responsibility to review the application and determine if it satisfies the conditions for a concession. Furthermore, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the concession. In this case, no submissions were received. The Act also requires that a TCO is deemed to have come into force on the day the application was lodged, which for TCO No. 0717749 was 17 October 2007.
Breaching the requirements or obligations set out in the Customs Act 1901 can have significant legal consequences. While the specific penalties for non-compliance with TCO provisions are not detailed in the explanatory statement, general contraventions of the Customs Act can result in civil and criminal penalties. Under the Customs Act, penalties for offences can include fines and imprisonment. The exact penalties depend on the nature and severity of the offence, but they can be substantial, reflecting the seriousness of non-compliance with customs regulations. For example, knowingly making a false statement in relation to customs matters can attract a penalty of up to 10,000 penalty units or imprisonment for up to 10 years, or both, under section 233 of the Customs Act. Therefore, parties involved in the TCO process must adhere strictly to the statutory requirements to avoid these serious repercussions.