EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829207
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.
Trucks Australia Limited applied for a TCO in respect of certain bus chassis on 28 August 2008.
Instrument
TCO No 0829207 was made on 07 November 2008. It declares that those certain bus chassis 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. 0829207 is taken to have come into force on 28 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. 0829207, enacted under the Customs Act 1901, was introduced to provide a lower rate of customs duty for specific goods through a Tariff Concession Order (TCO). The instrument was made on 7 November 2008 by the Chief Executive Officer of Customs, following an application from Trucks Australia Limited on 28 August 2008 for certain bus chassis. The decision was made in accordance with section 269F of the Customs Act 1901, which allows for tariff concessions if no substitutable goods are produced in Australia. The primary policy objective of this instrument, as outlined in the Act, is to provide relief to importers by lowering the duty on specified goods, thereby ensuring that they are not disadvantaged by the imposition of higher duties on imported goods that have no local substitutes. This instrument effectively came into force on the date of the application, 28 August 2008, and provides importers with the ability to apply for a refund of duty on goods imported since that date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) which are instrumental in providing tariff concessions on certain imported goods. These orders apply to goods specified in the TCO and are subject to the conditions set out in the Customs Act. The Act allows an individual or entity to apply to the Chief Executive Officer of Customs for a TCO if the goods in question do not fall under the prohibited list outlined in section 269SJ of the Act. The application must meet core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269C, 269D, 269E, and 269F of the Act. If the application meets these criteria, the CEO is obligated to make a TCO, as stipulated in section 269P(3). The TCO declares that the specified goods will be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively altering the rate of duty applicable to those goods. Notably, the TCO does not affect any pre-existing rights of persons other than the Commonwealth nor does it impose any liabilities on such persons for actions taken prior to the TCO's registration. However, the rights of importers are positively affected as they may apply for a refund of duty on goods imported since the date the TCO came into force.
Key Provisions
The main operative sections of the Customs Act 1901, as related to Tariff Concession Orders (TCOs), include section 269C, which outlines the core criteria for a TCO application to be considered valid. Specifically, the application must demonstrate that no substitutable goods are produced in Australia at the time the application is lodged (section 269C). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods, and section 269SJ details the types of goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria, they must make a written TCO, as mandated by section 269P(3).
The Act imposes several obligations on the parties involved. For instance, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit objections if they believe a TCO should not be granted. The CEO must consider any submissions received before making a decision. Furthermore, section 269D, 269E, and 269F provide definitions and further criteria for terms such as 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods,' respectively, which must be considered during the assessment process.
The Customs Act 1901 also outlines the consequences for breaches of its provisions. While specific offences related to the misuse or fraudulent application for a TCO are not detailed in the explanatory statement, it is reasonable to infer that any breaches of the Act's provisions could lead to legal action under general provisions of the Act. This might include administrative penalties, fines, or other civil and criminal consequences, depending on the nature and severity of the breach. The penalties for such offences are not explicitly stated in the explanatory statement but can be inferred to be consistent with the broader penalties provided for under the Customs Act 1901.