EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0805376
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.
Imtram Pty Ltd applied for a TCO in respect of certain tram wheel hubs on 28 April 2008.
Instrument
TCO No 0805376 was made on 18 July 2008. It declares that those certain tram wheel hubs 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. 0805376 is taken to have come into force on 28 April 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 Customs Act 1901 was enacted to provide a comprehensive framework for the administration of customs duties, excise duties, and goods subject to customs and excise. One of its mechanisms, established in Part XVA, involves Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on certain goods. This was introduced to address the need for economic incentives for certain industries by reducing the cost of importing specific goods, thereby facilitating trade and economic activity. The instrument F2008L02755, Tariff Concession Instrument No. 0805376, made under the authority of the Customs Act 1901, was introduced to grant a tariff concession for certain tram wheel hubs. The Chief Executive Officer of Customs made this order following an application by Intram Pty Ltd, and determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO. This instrument was published in the Gazette, inviting public submissions, though none were received. The TCO aims to benefit importers by potentially allowing them to apply for a refund of duty on goods imported from the date the TCO was taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0805376 under the Customs Act 1901 applies to the specific goods, namely certain tram wheel hubs, for which Intram Pty Ltd applied for a Tariff Concession Order (TCO). The Act governs the process by which the Chief Executive Officer (CEO) of Customs may reduce the rate of customs duty on goods specified in a TCO application, provided the application meets the core criteria and does not relate to goods prohibited by section 269SJ of the Act. The CEO must also be satisfied that no substitutable goods were produced in Australia on the day the application was lodged, in accordance with sections 269C and 269D of the Act. This TCO applies nationally, as it is an instrument made under the Commonwealth's authority, and its scope is limited to the goods specified in the order. The TCO does not disadvantage any person or impose liabilities on anyone for actions taken before its effective date, which is taken to be the date the application was lodged, in this case, 28 April 2008. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The primary sections of this legislation (sections 269C, 269F, 269P(3), 269K(1), and 269S(1)) outline the process for applying for, and the criteria for granting, Tariff Concession Orders (TCO) under the Customs Act 1901. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria specified in section 269C. If satisfied that no substitutable goods were produced in Australia on the application date, the CEO is required under section 269P(3) to issue a written order (a TCO) that designates the goods in question as subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette under section 269K(1) inviting any interested parties to submit their views on the application. Finally, section 269S(1) specifies that the TCO takes effect from the date the application was lodged.
The Act imposes several obligations on parties involved in the TCO process. An applicant must ensure their application complies with the requirements of section 269F and does not pertain to goods excluded by section 269SJ. The CEO is mandated to evaluate applications against the core criteria in section 269C, which includes verifying that no substitutable goods were produced in Australia on the application date. Additionally, the CEO must publish a notice in the Gazette under section 269K(1) and consider any submissions received. Should the CEO decide to grant a TCO, they must issue a written order under section 269P(3) specifying the applicable duty rate from the Customs Tariff Act 1995.
Failure to comply with the provisions of this Act may lead to various legal consequences. While the explanatory statement does not explicitly list offences or penalties, breaches of customs regulations generally fall under the purview of the Customs Act 1901 and associated regulations. Penalties for contravening customs laws can include fines, imprisonment, or both, depending on the severity of the offence. For example, knowingly making a false statement in a customs declaration could result in a fine of up to $22,200 or imprisonment for up to two years, or both, under section 228 of the Customs Act 1901. Additionally, failure to pay applicable duties and taxes may lead to civil actions for recovery of the owed amounts, including interest and penalties.