EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0815767
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.
Department Of Defence applied for a TCO in respect of certain aircraft rescue and fire fighting vehicle on 02 July 2008.
Instrument
TCO No 0815767 was made on 26 September 2008. It declares that those certain aircraft rescue and fire fighting vehicle 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. 0815767 is taken to have come into force on 02 July 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, enacted by the Australian Parliament, facilitates the application of reduced customs duties on certain goods through Tariff Concession Orders (TCOs). The 2008 instrument, Tariff Concession Instrument No. 0815767, was introduced to provide tariff concessions on specific aircraft rescue and fire-fighting vehicles, addressing the need for the Department of Defence to access these critical vehicles at a reduced duty rate. The instrument was created after satisfying the core criteria under section 269C of the Act, which stipulates that the goods in question are not substitutable by any produced in Australia. The instrument was published in the Gazette, inviting public submissions, though none were received. The TCO was effective from the date of the application, 2 July 2008, with no retroactive implications for parties other than the Commonwealth, thereby ensuring the rights of importers are positively impacted and no new liabilities are imposed.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation allows for a reduced rate of customs duty on certain goods, provided that the application for a TCO meets the core criteria outlined in the Act. These criteria require that, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. The Act delineates terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" to assist in determining eligibility for a TCO. Any person, including the Department of Defence, can apply for a TCO if the goods in question are not restricted under section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, a TCO is issued, as evidenced by TCO No. 0815767, which granted a tariff concession on certain aircraft rescue and fire-fighting vehicles, setting their duty rate to free, down from the general rate of 5%. The Act mandates consultation by inviting submissions from interested parties, although in this case, none were received. The TCO is effective from the date the application was lodged, thus ensuring that it does not disadvantage any party or impose liabilities for actions taken prior to the TCO's registration.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, provide a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F (1) allows for an application to be made to the CEO for a TCO in respect of specific goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods are produced in Australia, the CEO must make a TCO (sections 269P(3) and 269S(1)). This TCO specifies a lower rate of customs duty for the goods in question, as determined by a prescribed item in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on parties applying for a TCO. The applicant must ensure that the goods specified in the application do not fall under the prohibited category outlined in section 269SJ. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties if they believe there are reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the failure to comply with TCOs. However, breaches of customs laws generally could result in civil or criminal penalties, including fines and imprisonment, depending on the severity and intent behind the breach. The specific penalties would be determined by the courts based on the applicable laws and circumstances of the case. The rights of importers are beneficially affected by TCOs, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).