EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718439
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.
Australian Tyre Traders Pty Ltd applied for a TCO in respect of certain bus or lorry tyres on 29 October 2007.
Instrument
TCO No 0718439 was made on 31 January 2008. It declares that those certain bus or lorry tyres 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. 0718439 is taken to have come into force on 29 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. 0718439, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for certain bus or lorry tyres, allowing for a reduction in customs duty for these goods. This instrument was created in response to an application by Australian Tyre Traders Pty Ltd on 29 October 2007, which sought a tariff concession order (TCO) for specific tyres not produced in Australia. The instrument was subsequently made by the Chief Executive Officer of Customs on 31 January 2008, after determining that no substitutable goods were being produced domestically. The primary objective of this legislation, as outlined in the Customs Act, is to facilitate tariff concessions for goods not manufactured in Australia, thereby benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Customs Act 1901, as specified in Tariff Concession Instrument No. 0718439, applies to individuals and entities that seek to import specific goods into Australia, particularly those applying for a Tariff Concession Order (TCO). This Act allows for reduced customs duty rates on goods subject to a TCO, provided that the application meets the core criteria outlined in the Act. These criteria include the absence of substitutable goods produced in Australia at the time of the application. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia. However, it specifically excludes goods that are listed in section 269SJ of the Act, which cannot be subject to a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments. In this case, the TCO No. 0718439 was made concerning certain bus or lorry tyres, granting them a tariff concession by setting the duty rate at free, applicable from the date the application was lodged, 29 October 2007.
Key Provisions
The main sections of Tariff Concession Instrument No. 0718439 under the Customs Act 1901 (the Act) outline the process and criteria for the Chief Executive Officer of Customs (the CEO) to grant Tariff Concession Orders (TCOs). Specifically, section 269F allows for applications to be made to the CEO for TCOs, provided the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). For this particular TCO No. 0718439, certain bus or lorry tyres are declared as goods to which item 50 of Schedule 4 applies, resulting in a duty-free status for these goods.
The Act imposes several obligations on the parties involved. Firstly, any person may apply for a TCO if the goods in question are eligible under the Act. The CEO must then assess whether the application meets the core criteria, specifically ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO determines that the application meets these criteria, they are mandated to make a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this case, no submissions were received.
The Act also outlines the consequences of breaches, though no specific offences are mentioned in the explanatory statement. The Tariff Concession Instrument No. 0718439 specifies that the TCO does not affect the rights of any person other than the Commonwealth in a way that disadvantages them or imposes liabilities for actions taken before the TCO's effective date. Importers, however, stand to benefit from the TCO as they can apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Any failure to comply with the requirements set forth in the Act or the Tariff could result in legal consequences, although the specific penalties are not detailed in the explanatory statement.