EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828159
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 trucks chassis 6x2 drawbar on 26 August 2008.
Instrument
TCO No 0828159 was made on 14 November 2008. It declares that those certain trucks chassis 6x2 drawbar 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. 0828159 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 Customs Act 1901, enacted by the Commonwealth Parliament, governs the administration of customs and excise in Australia. It provides the legal framework for the collection of customs duty and the regulation of imported goods. The Act was amended to introduce the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, as a measure to facilitate trade and reduce the cost of imported goods by offering concessions on customs duty. The primary policy objective of this scheme is to support Australian businesses by making imported goods more competitively priced, thus encouraging their use and integration into domestic production processes where local substitutes are not available. This mechanism ensures that Australian businesses can access necessary goods without the barrier of high customs duties, thereby fostering economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0828159 applies specifically to certain trucks chassis 6x2 drawbar, and it is established under Part XVA of the Customs Act 1901. The instrument was made by the Chief Executive Officer of Customs (CEO) following an application by Iveco Trucks on 26 August 2008 and came into force on the same day. The application was processed in accordance with the Act, and the CEO declared that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged, thereby meeting the core criteria set out in the Act. As a result, a Tariff Concession Order (TCO) was issued, which grants a concession on the duty rate applicable to these specific goods from the general rate of 5% to free. The application of this TCO is national in scope, impacting the importation of these goods across Australia, and it does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The primary operative sections of the Customs Act 1901, as detailed in the Explanatory Statement for Tariff Concession Instrument No. 0828159, pertain to the creation and effect of Tariff Concession Orders (TCOs). Section 269F allows an application for a TCO to be made to the Chief Executive Officer (CEO) of Customs, provided the goods are not those listed in section 269SJ, which are ineligible for a TCO. The CEO must assess whether the application meets the core criteria specified in section 269C, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO is mandated to issue a written order, a TCO, declaring that the specified goods will be subject to a reduced rate of customs duty as per the prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties involve ensuring compliance with the core criteria when applying for a TCO. The CEO must publish a notice in the Gazette inviting submissions from any person who might object to the making of a TCO, as per subsection 269K(1). In the case of TCO No. 0828159, no submissions were received, indicating no objections were raised. Additionally, the Act ensures that the TCO does not affect existing rights or impose liabilities on any person except the Commonwealth, safeguarding the interests of importers and other stakeholders.
The legislation also outlines consequences for breaches, although specific offences, penalties, or consequences are not detailed in the provided explanatory statement. Typically, breaches of customs legislation can result in civil or criminal penalties, which may include fines or imprisonment, depending on the severity and intent of the breach. The Customs Act 1901 and associated regulations, such as the Customs Regulations 1999, would provide further details on these penalties. For instance, penalties for customs offences can range from fines up to several thousand dollars for individuals and significantly higher for corporations, alongside potential imprisonment terms.
In summary, the Customs Act 1901 facilitates the establishment of TCOs through a structured application and assessment process, with clear obligations for applicants and the CEO. The legislation also ensures that the rights of existing parties are protected, and it includes mechanisms for public consultation on proposed TCOs. While specific penalties for breaches are not detailed in the provided explanatory statement, breaches of customs legislation generally attract significant civil and criminal penalties.