EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818481
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.
Toyota Motor Corporation applied for a TCO in respect of certain motor generator continuously variable transmisson transaxle on 14 July 2008.
Instrument
TCO No 0818481 was made on 03 October 2008. It declares that those certain motor generator continuously variable transmisson transaxle 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. 0818481 is taken to have come into force on 14 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, includes a scheme for Tariff Concession Orders (TCOs) designed to reduce customs duty on specified goods. The aim of this mechanism is to provide relief where goods for which an application has been made are not produced domestically and are thus not subject to competitive pressures from local manufacturing. The explanatory statement for Tariff Concession Instrument No. 0818481, which was enacted in 2008, details that this particular instrument was created following an application by Toyota Motor Corporation for a TCO concerning certain motor generator continuously variable transmission transaxles. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a concession, and the application was approved. The policy objective is to support the import of goods that are not domestically produced, thereby potentially lowering costs for consumers and businesses reliant on these imports.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia, with a specific focus on the process of applying for Tariff Concession Orders (TCOs) for certain goods. The Act enables the Chief Executive Officer of Customs (CEO) to issue TCOs that provide a lower rate of customs duty on specified goods, provided that these goods do not fall under the exclusions listed in section 269SJ of the Act and meet the core criteria outlined in section 269C. The Act applies on a national level and encompasses the entire Commonwealth of Australia, with the CEO holding the authority to make decisions on TCO applications. Notably, the application of the Act is extended through subordinate instruments such as the Customs Tariff Act 1995, which further defines terms and rates of duty. The scope of the Act is also influenced by any submissions made in response to published notices in the Gazette, although in this instance, no submissions were received regarding TCO No. 0818481.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0818481 are sections 269C, 269F, 269P, and 269S, which are part 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. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, and that the goods are not specified in section 269SJ, the CEO must make a written order (section 269P). Section 269S specifies that the TCO is taken to have come into force on the day the application was lodged.
The obligations and requirements the Act imposes on the parties it governs are that the CEO must review the application and determine whether it meets the core criteria, which involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties regarding the application (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. Importers of the goods subject to the TCO can apply for a refund of duty paid on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The Customs Act 1901 includes provisions for offences and penalties related to breaches of the Act and its regulations. For instance, section 269SJ lists goods that cannot be subject to a TCO, and any application that fails to comply with this provision could result in the CEO declining to make a TCO. While the explanatory statement does not detail specific penalties for breaches of the Act or Regulations, it is common under Australian law for breaches to result in fines or other penalties as prescribed by the relevant legislation. The maximum penalties can vary widely depending on the nature and severity of the breach.