EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803137
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.
Yamaha Motor Australia Pty Ltd applied for a TCO in respect of certain personal watercrafts on 25 February 2008.
Instrument
TCO No 0803137 was made on 07 May 2008. It declares that those certain personal watercrafts 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. 0803137 is taken to have come into force on 25 February 2008.
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. 0803137, enacted in 2008 under the Customs Act 1901, addresses the problem of ensuring that tariff concessions are granted appropriately to certain goods, thereby facilitating their importation at a lower rate of customs duty. This legislative instrument was introduced to provide a structured process for the Chief Executive Officer of Customs to assess and approve applications for tariff concession orders (TCOs) for specific goods. The policy objective behind this instrument is to ensure that the granting of tariff concessions is based on the principle that no substitutable goods are produced in Australia, thereby preventing any domestic industry from being unfairly disadvantaged. The instrument was developed by the Australian Government and aims to streamline the process for granting tariff concessions, ensuring that they are applied fairly and transparently.
Scope and Application
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be made, granting lower rates of customs duty to specified goods. This is achieved through the application process outlined in Part XVA of the Act, whereby an applicant can seek a TCO from the Chief Executive Officer of Customs (CEO) if certain conditions are met. Specifically, the goods in question must not be listed in section 269SJ of the Act, which identifies goods ineligible for TCOs, and the application must meet the core criteria set out in section 269C, meaning no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The CEO is required to make a written order, a TCO, if satisfied that the application meets these criteria. The TCO applies nationally across Australia and is effective from the date the application was lodged, without affecting the rights of any person as at the date of registration to their disadvantage. The process involves public consultation, where any objections to the TCO can be raised with the CEO, although in this instance, no submissions were received. The scope of the Act and the TCOs it facilitates extends to any entity or individual involved in the importation of goods that may qualify for such concessions, thereby impacting the importation process and the associated duties.
Key Provisions
The key operative sections of this legislation include sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, section 269P(3) requires the CEO to make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the rate of duty specified in the order.
The Act imposes certain obligations on both the applicant and the CEO of Customs. The applicant must ensure that the goods for which the TCO is sought do not have substitutable equivalents produced in Australia. The CEO, on receiving a valid application, must assess whether the core criteria are met and decide whether to make a TCO. If the CEO determines that the application meets the core criteria, they must issue a written TCO. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, no submissions were received.
Under the Customs Act 1901, breaches of the conditions set out in a TCO could lead to various consequences. While the explanatory statement does not detail specific offences or penalties, it is reasonable to infer that failure to comply with the terms of a TCO could result in the imposition of customs duties at the applicable rates, as well as potential civil or criminal penalties for fraudulent or deliberate non-compliance. Typically, the penalties for breaches of customs regulations can include fines and, in severe cases, imprisonment. The exact penalties would depend on the specific nature and severity of the breach, as outlined in the broader customs legislative framework.