EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0834390
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.
Tmc Australia Pty Ltd applied for a TCO in respect of certain truck axles on 07 October 2008.
Instrument
TCO No 0834390 was made on 12 January 2009. It declares that those certain truck axles 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. 0834390 is taken to have come into force on 07 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 Tariff Concession Instrument No. 0834390 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain goods that are not produced domestically. This instrument specifically applies to truck axles, allowing them to benefit from a reduced rate of customs duty as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995. This was enacted to ensure that no substitutable goods were produced in Australia, thereby supporting the policy objective of encouraging the importation of such goods without imposing additional financial burdens. The instrument was made by the Chief Executive Officer of Customs, who was satisfied that the application met the core criteria and published a notice in the Gazette for any potential objections, which did not eventuate. The tariff concession came into force on 7 October 2008, with the aim of enhancing the rights of importers who could now apply for duty refunds on goods imported since that date, without affecting any pre-existing rights or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0834390 under the Customs Act 1901 applies to specific goods, namely certain truck axles, which are subject to a lower rate of customs duty as a result of the Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs. The instrument aims to provide relief from customs duty on these goods if no substitutable goods are produced in Australia in the ordinary course of business. The application of the Act is not limited by geographic or jurisdictional boundaries, as it operates under the overarching authority of the Commonwealth. The legislation does not impose any liabilities or disadvantages to any person other than the Commonwealth and does not affect pre-existing rights of persons other than the Commonwealth. The TCO allows for a refund of duty on goods imported since the effective date of the order, which is the date the application was lodged, thereby benefiting importers of the specified goods. The Act may be extended or restricted through subordinate instruments, providing flexibility in its application.
Key Provisions
The primary operative sections of this legislation include sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, 269SJ, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that an application must meet, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B provides definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269K requires the CEO to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. Finally, Section 269SJ specifies goods that cannot be subject to a TCO, while Section 269S explains that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person seeking a TCO must ensure their application meets the core criteria outlined in Section 269C. This includes demonstrating that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Secondly, the CEO must act promptly in deciding whether to grant a TCO, and they must make a written order if the application meets the criteria. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. The CEO must then consider any submissions received and make a decision based on the merits of the application. The Act also ensures that the rights of importers are beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force.
Failure to comply with the provisions of the Act can result in various offences, penalties, or civil/criminal consequences. While the explanatory statement does not provide specific details about the penalties for breach, it is implied that any non-compliance with the Act's requirements could lead to legal action. The Act's provisions are designed to ensure that the process for granting TCOs is fair and transparent, and any breach of these provisions could result in legal consequences for the parties involved. For instance, if a person knowingly makes a false or misleading statement in their application for a TCO, they could face criminal charges under the Commonwealth Criminal Code Act 1995. Additionally, any person who fails to comply with the requirements of a TCO once it has been granted could face civil penalties, such as fines or compensation for any losses incurred by the Commonwealth as a result of their non-compliance.
In summary, the legislation sets out a clear framework for the granting of TCOs under the Customs Act 1901, with specific requirements and obligations for both applicants and the CEO. The Act ensures that the process for granting TCOs is fair and transparent, and it provides for potential consequences for any breach of its provisions. The explanatory statement provides a detailed overview of the key provisions of the legislation, including the operative sections, the obligations and requirements imposed on the parties, and the potential consequences for breach.