EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717751
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 0717751 was made on 16 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 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. 0717751 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 Tariff Concession Instrument No. 0717751, enacted in 2008, is a legislative instrument under the Customs Act 1901. This Act provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing tariff concessions for specified goods. Western Star Trucks Australia Pty Ltd applied for a TCO in respect of certain on-road truck parts, which was granted after it was determined that no substitutable goods were being produced in Australia. The general customs duty on these parts is 10%, but the TCO reduced this to a free rate. The instrument was published in the Gazette, inviting any interested parties to submit objections, none of which were received. The TCO came into force on the date the application was lodged, retroactively benefiting importers by allowing them to apply for duty refunds. The instrument does not affect the rights of any person other than the Commonwealth or impose any liabilities on any person.
The enacting body for this instrument is the Australian Government, specifically pursuant to the Customs Act 1901, with the policy objective of providing tariff relief for specific goods where no substitutable domestic production exists. This ensures that Australian businesses can access necessary goods at a reduced cost, thereby promoting competitiveness and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0717751, made under the Customs Act 1901, pertains to the application and operation of Tariff Concession Orders (TCOs) as authorised by the Chief Executive Officer of Customs (CEO). The Act applies to any person or entity that seeks to import goods that are eligible for tariff concessions, effectively reducing the rate of customs duty applied to these goods. The scope of the Act extends nationally, as it is a Commonwealth instrument, thus impacting all imports into Australia. The Act excludes certain goods from eligibility for TCOs as specified in section 269SJ, ensuring that only those goods not substitutable by Australian-produced products can benefit from reduced duty rates. The CEO is mandated to make a TCO if the application meets the core criteria, specifically when no substitutable goods are produced in Australia in the ordinary course of business. The commencement of this particular TCO, effective from 17 October 2007, aligns with the legislative framework outlined in the Customs Act 1901, ensuring that the rights of importers are protected without imposing liabilities on them for actions taken prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCO) for certain goods, granting them a reduced rate of customs duty. The CEO can only issue a TCO if the applicant’s request meets the core criteria specified in section 269C. This means that on the date the application is lodged, no substitutable goods should be produced in Australia in the ordinary course of business. The definitions for these terms are provided in sections 269D (goods produced in Australia), 269E (ordinary course of business), and 269F (substitutable goods). For the purpose of a TCO application, substitutable goods are defined as those produced in Australia that can be used in a way similar to the goods in question.
Entities subject to the Act must ensure that their applications for a TCO comply with the criteria mentioned in section 269C. The CEO must then verify the absence of substitutable goods in Australia at the time of application. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made. This transparency requirement ensures that all stakeholders have an opportunity to voice their concerns regarding the concession. In the case of TCO No. 0717751, no submissions were received, indicating that no objections were raised to the concession for the specified on-road truck parts.
Should a party fail to comply with the requirements outlined in the Customs Act 1901 or the associated regulations, they may face civil or criminal penalties. For example, under section 133 of the Act, if a person knowingly or recklessly provides false or misleading information in an application for a TCO, they may be liable for a penalty. The maximum penalty for such an offence can be substantial, reflecting the seriousness of providing misleading information to obtain an undue advantage. Additionally, failure to adhere to the terms of the TCO or misuse of the concession may result in further penalties, including fines or legal action to recover any undue benefits received.