EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718128
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.
Adelux Pty Ltd applied for a TCO in respect of certain motor vehicle battery lid assembly line on 24 October 2007.
Instrument
TCO No 0718128 was made on 16 January 2008. It declares that those certain motor vehicle battery lid assembly line 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. 0718128 is taken to have come into force on 24 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 was enacted by the Australian Parliament to provide a framework for the administration of customs and excise, including the imposition and collection of duties and taxes on imported and exported goods. A specific issue it addresses is the facilitation of trade by providing tariff concessions on certain goods, thereby reducing the financial burden on importers and promoting economic activity. One such measure is the creation of Tariff Concession Orders (TCOs) under Part XVA of the Act, which allow for reduced or waived customs duties on specified goods. The Tariff Concession Instrument No. 0718128, enacted in 2008, is an example of such an order, providing a tariff concession for certain motor vehicle battery lid assemblies, reflecting the policy objective of supporting specific industries by lowering import costs. This instrument was introduced following an application by Adelux Pty Ltd and was made effective from the date of application, without any adverse impact on existing rights or liabilities.
Scope and Application
The Customs Act 1901, as explained in the Tariff Concession Instrument No. 0718128, pertains to the process of granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person who applies for a TCO in relation to goods, provided that the goods are not specified in section 269SJ of the Act which excludes certain types of goods from TCO eligibility. The Act extends to the Commonwealth jurisdiction and governs the conduct and transactions involving the importation of goods that are subject to a TCO. A TCO application is subject to core criteria as specified in sections 269C and 269S of the Act, ensuring that the application is valid and that no substitutable goods are produced in Australia. The geographic reach of this Act is national, as it applies to goods entering Australia and is subject to the terms and conditions set out in the Customs Act 1901 and the Customs Tariff Act 1995. The application of the Act may be extended or restricted through subordinate instruments, such as regulations, which provide further details on the administration and implementation of the TCO scheme.
Key Provisions
The main operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0718128, involve the procedures and criteria for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO). Specifically, section 269F of the Act allows a person to apply to the CEO for a TCO in respect of goods, provided these goods are not specified in section 269SJ as ineligible. If the application is valid, the CEO must then determine if it meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are satisfied, the CEO must issue a written TCO as per section 269P(3).
Under section 269K(1), the CEO is obligated to publish a notice in the Gazette after accepting a TCO application, inviting any interested parties to submit their views on whether the TCO should be made. The CEO is also required to consider these submissions before making a final decision. In the case of TCO No. 0718128, no submissions were received in response to the notice.
The TCO imposes specific obligations on the parties it governs. The CEO must ensure that the application for a TCO complies with the core criteria and must make a decision within the stipulated timeframe. Importers of the goods subject to the TCO can benefit by applying for a refund of any duty paid on imports of these goods since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities on any person.
Failure to comply with the provisions of the Customs Act 1901 and the Tariff Concession Instrument No. 0718128 can result in various consequences. The Act does not specify any offences, penalties, or civil/criminal consequences directly within the instrument itself, but it is understood that non-compliance with the Customs Act and related regulations can lead to financial penalties, legal action, or other administrative consequences as per the broader Customs Act provisions. The specific penalties would depend on the nature and severity of the breach, but they can include fines and other sanctions as determined by the relevant authorities.