EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818490
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 power control unit on 15 July 2008.
Instrument
TCO No 0818490 was made on 10 October 2008. It declares that those certain power control unit 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. 0818490 is taken to have come into force on 15 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 Commonwealth Parliament, provides a framework for the imposition of customs duty on imported goods. Specifically, Part XVA of the Act establishes a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders can reduce the rate of customs duty applied to certain goods, provided the application for the concession meets specific criteria. The problem this legislation seeks to address is the facilitation of the importation of goods that cannot be readily produced in Australia, thereby encouraging trade and economic efficiency. In the case of Tariff Concession Instrument No. 0818490, Toyota Motor Corporation applied for a concession on certain power control units, which was subsequently granted by the CEO on 10 October 2008, following a determination that no substitutable goods were produced in Australia. The policy objective is to ensure that importers are not disadvantaged by the introduction of such concessions, while also promoting the efficient and fair operation of the customs duty system.
Scope and Application
The Tariff Concession Instrument No. 0818490 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions for specific goods entering Australia, with the scope extending to those entities who have applied for such concessions and meet the criteria set out in the Act. This instrument was specifically applied to Toyota Motor Corporation's request for a tariff concession on certain power control units, granting them a tariff rate of free as opposed to the general rate of 5%. The geographic reach of this Act is national, as it pertains to customs duties and concessions throughout Australia. The Act's application is subject to certain exclusions, particularly those goods specified in section 269SJ, which cannot be the subject of a tariff concession order. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, although this particular TCO does not introduce new exclusions or thresholds beyond those already established by the primary legislation.
Key Provisions
The main provisions of this Tariff Concession Instrument (TCO) No. 0818490, under the Customs Act 1901 (section 269F), involve the process and conditions for granting a Tariff Concession Order (TCO) for certain power control units. If an application for a TCO is lodged with the Chief Executive Officer (CEO) of Customs and the CEO determines that the goods in question are not specified in section 269SJ, the CEO must then assess whether the application meets the core criteria (section 269C). Specifically, the CEO must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If this criterion is met, the CEO must make a TCO, as outlined in section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
The obligations and requirements imposed by the Act on parties or entities it governs include the submission of a TCO application by interested parties such as Toyota Motor Corporation. The CEO, upon accepting the application as valid, must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. Furthermore, once a TCO is made, it is taken to have come into force on the day the application was lodged (subsection 269S(1)). The rights of importers will be beneficially affected, and they can 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).
The Act does not specify any civil or criminal penalties for breach in this context. However, the Act does ensure that a 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 in respect of anything done or omitted to be done before the date of registration. The TCO in question does not impose any liabilities on any person.