EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828158
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.
Iveco Trucks applied for a TCO in respect of certain truck chassis 4x2 drive on 26 August 2008.
Instrument
TCO No 0828158 was made on 07 November 2008. It declares that those certain truck chassis 4x2 drive 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. 0828158 is taken to have come into force on 26 August 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. 0828158 was enacted in 2008 under the Customs Act 1901 to provide a tariff concession for certain truck chassis 4x2 drives, reducing the customs duty rate from 5% to free. The Customs Act 1901 establishes a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to lower the duty on goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This instrument specifically addresses the application made by Iveco Trucks on 26 August 2008, which was approved and came into effect on the same day, benefiting importers by potentially allowing them to claim refunds for duties paid prior to the concession. The process involved publication in the Gazette with no objections received, ensuring the rights of all parties were preserved.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods, granting them a lower rate of customs duty than what is generally prescribed. The Act allows any person to apply to the CEO for a TCO concerning goods, provided the goods are not specified in section 269SJ, which lists items ineligible for TCOs. For a TCO to be issued, the CEO must ascertain that the application complies with the core criteria, notably that no substitutable goods were produced in Australia on the day the application was lodged. This criterion is defined in sections 269C, 269D, and 269E of the Act. If the CEO determines that the application meets these criteria, they are mandated to issue a TCO under section 269P(3). This instrument was exemplified by Tariff Concession Instrument No. 0828158, which was issued on 7 November 2008, declaring certain truck chassis 4x2 drive eligible for tariff concessions, resulting in a duty-free status for these goods. The Act extends its application across the Commonwealth of Australia, and its provisions may be further elaborated or restricted through subordinate legislation.
Key Provisions
The main operative sections of this legislation include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C outlines the core criteria that a TCO application must meet, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods subject to the TCO. In this particular case, TCO No. 0828158 was made on 7 November 2008, declaring that certain truck chassis 4x2 drive are subject to a TCO, as no substitutable goods were produced in Australia, and thus the goods are subject to a rate of duty of free, instead of the general rate of 5% (section 269P(3)).
The Act imposes several obligations and requirements on the parties and entities it governs. For example, under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application. This notice 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. In this case, the CEO did not receive any submissions in response to this invitation (subsection 269K(1)). Additionally, the Act ensures 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 (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
Under the Customs Act 1901, several offences, penalties, or civil/criminal consequences may apply for breach of the Act's provisions. However, the explanatory statement does not provide explicit information about the penalties or consequences for non-compliance with the Act's provisions in this specific context. It is important to note that the explanatory statement does not provide information on maximum penalties, as it focuses on the procedural aspects of the TCO application process and the effects of the TCO on the rights of parties involved. Therefore, any penalties or consequences for breach of the Act's provisions would need to be determined in accordance with the general provisions of the Customs Act 1901 and any relevant regulations.