EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831070
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.
White Horse Truck and Bus applied for a TCO in respect of certain truck cabin air conditioners on 17 September 2008.
Instrument
TCO No 0831070 was made on 05 December 2008. It declares that those certain truck cabin air conditioners 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. 0831070 is taken to have come into force on 17 September 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 Parliament of Australia, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for reduced rates of customs duty on certain goods, thus addressing the need to support industries and consumers by lowering the cost of imported goods under specific conditions. TCOs are designed to ensure that imported goods for which concessions are sought do not have substitutable alternatives produced domestically. In the case of Tariff Concession Instrument No. 0831070, the policy objective was to grant tariff concessions on certain truck cabin air conditioners, resulting in a reduction of the general duty rate of 5% to free, effective from the date of the application on 17 September 2008. This measure was intended to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, as augmented by Tariff Concession Order No. 0831070, applies to entities seeking tariff concessions for specific goods entering Australia. This Act allows the Chief Executive Officer of Customs to grant reduced customs duty rates to applicants who can demonstrate that no substitutable goods are produced in Australia. The application process involves meeting core criteria, including the absence of Australian-made goods that could serve as alternatives to the imported goods. The TCO applies to the specific truck cabin air conditioners for which White Horse Truck and Bus applied, granting them a zero-duty rate as opposed to the general rate of 5%. This legislation has a national reach, impacting importers who can benefit from the tariff concession, provided they adhere to the guidelines set out in the Customs Act and the Customs Tariff Act 1995. Notably, the order does not disadvantage existing rights or impose new liabilities on individuals or entities, safeguarding their interests as per the Act's provisions.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they relate to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order declaring that the goods in question are eligible for the concession. Section 269P specifies that the CEO must make the TCO if satisfied that the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia at the time of application.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must review TCO applications to ensure they comply with the statutory criteria and consider any submissions made against the application. In this case, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. If no submissions are received, the CEO proceeds to make the TCO if the application meets the criteria.
There are no explicit offences, penalties, or civil/criminal consequences detailed in the explanatory statement for failing to comply with the Act's provisions regarding TCOs. However, the process outlined in the Act is stringent, and non-compliance could potentially lead to legal challenges or disputes regarding the validity of a TCO. The Act ensures that the TCO does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities on persons other than the Commonwealth. This safeguards against any retroactive disadvantages or liabilities for parties that have acted in good faith prior to the TCO's registration.