EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806940
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.
Aisin (Australia) Pty Ltd applied for a TCO in respect of certain oil control valves on 07 May 2008.
Instrument
TCO No 0806940 was made on 01 August 2008. It declares that those certain oil control valves 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. 0806940 is taken to have come into force on 07 May 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. 0806940 was enacted in 2008 under the Customs Act 1901 to provide tariff concessions for certain goods, specifically oil control valves, thereby addressing the gap in duty rates for imported goods that have no Australian-made substitutes. This legislative instrument was developed to facilitate the import of these goods at a reduced rate, in alignment with the policy objective of ensuring that Australian consumers and businesses have access to competitively priced goods while also supporting the efficient operation of Australian industries that may not be equipped to produce certain specialised items domestically. The instrument was created by the Chief Executive Officer of Customs, who assessed the application by Aisin (Australia) Pty Ltd and determined that no substitutable goods were being produced in Australia, thus meeting the core criteria for tariff concessions. The instrument came into effect on the date the application was lodged, 7 May 2008, and benefits importers by allowing them to apply for refunds of duties paid on the goods since that date, without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0806940 applies to certain oil control valves specified in the Customs Act 1901, which provides for a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). The Act applies to individuals and entities who wish to apply for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act as ineligible for a concession. The instrument is geographically applicable within Australia, extending its provisions across the Commonwealth. The application of the Act is contingent on the CEO's determination that no substitutable goods are produced in Australia at the time of the application, as defined by sections 269D, 269E, and 269F of the Act. Any exclusions or exemptions are outlined within the Act itself, particularly in section 269SJ, which specifies goods that cannot be subject to a TCO. The scope of the Act may be further extended or restricted through subordinate instruments as deemed necessary by the CEO.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0806940 under the Customs Act 1901, as referenced in the explanatory statement, include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) regarding certain goods, provided that these goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, 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, as per section 269P(3). This instrument, TCO No. 0806940, specifically declares that certain oil control valves are goods to which item 50 of Schedule 4 applies, resulting in a duty-free rate for these goods.
The obligations imposed by the Act on the parties involved are multifaceted. Firstly, the CEO of Customs is required to review any application for a TCO to determine if it meets the core criteria stipulated in section 269C. If the application is valid, the CEO must then make a written TCO as outlined in section 269P(3). Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. The CEO is also obligated to consider any submissions received and respond appropriately. In this case, since no submissions were received, the CEO proceeded with the TCO.
In terms of breaches and penalties, the explanatory statement does not explicitly outline specific offences or penalties for non-compliance with the TCO. However, under the Customs Act 1901, general provisions exist for penalties related to breaches of customs regulations. These penalties can include fines and imprisonment for serious offences. For instance, under section 236 of the Customs Act, unauthorised importation of goods can result in penalties, including fines up to 10,000 penalty units or imprisonment for up to 10 years, or both, for serious breaches. It is essential for entities involved in the importation and application processes to adhere to the statutory requirements to avoid such penalties. The instrument itself does not impose any liabilities on any person and ensures that the rights of importers will be beneficially affected, allowing them to apply for duty refunds on goods imported since the TCO's effective date.