EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717750
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 parts on 17 October 2007.
Instrument
TCO No 0717750 was made on 18 January 2008. It declares that those certain on 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 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. 0717750 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 Australian Parliament, includes provisions under Part XVA to allow for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs. This legislative framework was designed to address the problem of ensuring that Australian businesses could access necessary goods at a reduced customs duty rate when no suitable Australian-made alternatives were available. The policy objective is to promote economic efficiency by ensuring that businesses have access to competitively priced imported goods, thereby supporting competitive markets and economic growth. In line with this objective, the Customs Act 1901 empowers the CEO to assess applications for TCOs and determine whether they meet the specified criteria, ultimately facilitating tariff concessions where appropriate.
Scope and Application
The Tariff Concession Instrument No. 0717750, made under section 269F of the Customs Act 1901, applies to certain on-road truck parts, specifically those that are eligible for a lower rate of customs duty as declared in the instrument. This Act facilitates the application process for Tariff Concession Orders (TCO) by allowing entities such as Western Star Trucks Australia Pty Ltd to apply for tariff concessions on goods that are not produced in Australia in the ordinary course of business. The CEO of Customs is responsible for deciding whether an application meets the core criteria for a TCO, and if satisfied, must issue a written order declaring the goods eligible for the concession. The application and subsequent order are effective from the date the application was lodged, in this case, 17 October 2007. The geographic reach of this Act is national, applying across all jurisdictions within Australia. There are no liabilities imposed on any person under this TCO, and it does not affect the rights of any person other than the Commonwealth. Importers of the specified goods will have their rights beneficially affected, with the potential to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0717750 under the Customs Act 1901 primarily operates by establishing a lower rate of customs duty for certain goods, in this case specific on-road truck parts, when a Tariff Concession Order (TCO) is issued. According to section 269F, any individual or entity can apply to the Chief Executive Officer (CEO) of Customs for such a concession. If the application is deemed valid and meets the core criteria specified in section 269C, the CEO must issue a TCO. For this specific case, TCO No. 0717750 was issued on 18 January 2008, declaring that the specified truck parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%.
Entities and individuals governed by this Act have specific obligations. The CEO must ensure that the application for a TCO does not pertain to goods listed in section 269SJ, which are ineligible for such concessions. If the application is valid, the CEO must assess whether the core criteria in section 269C are met, specifically checking if no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted, as mandated by subsection 269K(1). In this instance, no submissions were received by the CEO.
In terms of legal consequences, breaches of the requirements or misuse of the concessions provided by a TCO could lead to various penalties. While the explanatory statement does not specify penalties, breaches of customs regulations generally attract significant fines and potential criminal charges under the Customs Act 1901. The severity of penalties can depend on the nature and extent of the breach, with maximum penalties potentially involving substantial fines and imprisonment for serious violations. Importers who benefit from the TCO can also apply for refunds of duty paid on the goods since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations, without incurring any additional liabilities.