EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833985
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.
Normet Corporation Pty Ltd applied for a TCO in respect of certain cab chassis trucks on 03 October 2008.
Instrument
TCO No 0833985 was made on 19 December 2008. It declares that those certain cab chassis trucks 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. 0833985 is taken to have come into force on 03 October 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 was enacted by the Parliament of Australia to establish a comprehensive framework for the regulation of customs and excise duties. This Act, particularly through Part XVA, provides the legal basis for the creation of Tariff Concession Orders (TCOs), which are intended to offer relief from certain customs duties under specified conditions. One such order, Tariff Concession Instrument No. 0833985, was introduced to address the specific need for tariff concessions on certain cab chassis trucks, ensuring they are subject to a reduced rate of customs duty. The instrument was enacted to ensure that if the Chief Executive Officer of Customs is satisfied that no substitutable goods are produced in Australia, the application for a TCO can be approved, thus providing relief to importers of these goods. This legislative approach aims to support Australian businesses by making imported goods more competitively priced, thereby potentially boosting local industries that rely on these imported components.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process by which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which a lower rate of customs duty is set, contingent upon the CEO's satisfaction that the application for a TCO meets certain core criteria. A key criterion is that the goods in question should not be specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The CEO must also determine that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This instrument applies to any person who wishes to apply for a tariff concession on specific goods, with the application process including an opportunity for public submission before the CEO makes a decision. The geographic reach of this legislation is national, as it pertains to the customs duties applicable across Australia. Notably, the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The application of the TCO is effective from the date the application was lodged, with no retroactive effects on pre-existing rights or liabilities.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0833985 are section 269C, 269B, 269P, and 269SJ of the Customs Act 1901 (the Act), which establish the conditions under which a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (the CEO) (s 269F). A TCO application is required to meet the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that the application meets the core criteria, a written order is made, declaring that the goods are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
The Act imposes several obligations on the parties involved. The CEO is required to decide whether an application meets the core criteria and, if so, to make a written order (a TCO) (s 269F). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (s 269K(1)). In this case, the CEO did not receive any submissions in response to the notice. Additionally, the CEO must ensure that the TCO does not affect the rights of any 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 (s 269S(1)).
Under the Customs Act 1901, there are specific offences and penalties associated with breaches of the Act or the Regulations. For example, section 130 of the Act imposes a penalty of up to five years imprisonment or a fine of up to $21,000, or both, for knowingly making a false statement or representation in an application for a TCO. Additionally, section 131 of the Act imposes a penalty of up to two years imprisonment or a fine of up to $2,100, or both, for contravening a condition or requirement of the Act or the Regulations. However, in the context of Tariff Concession Instrument No. 0833985, there are no specific offences or penalties mentioned, beyond those generally applicable under the Customs Act 1901 and the Customs Regulations 1999.