EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840620
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.
Man Automotive Imports Pty Ltd applied for a TCO in respect of certain buses cylinder assemblies on 20 November 2008.
Instrument
TCO No 0840620 was made on 27 February 2009. It declares that those certain buses cylinder assemblies 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. 0840620 is taken to have come into force on 20 November 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 Order (TCO) No. 0840620 was introduced to provide a concession on customs duty for certain buses cylinder assemblies. Enacted in 2009, this instrument amends the Customs Act 1901 by applying a zero duty rate to these specific goods, which contrasts with the general rate of 5%. This concession was implemented by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria stipulated in section 269C of the Act. The policy objective, as stated in the explanatory statement, is to provide tariff relief where appropriate, enhancing trade and reducing costs for importers. The TCO was effective from 20 November 2008, the date on which the application was lodged, and it does not disadvantage or impose liabilities on any person under the conditions set out in the Act.
Scope and Application
The Tariff Concession Instrument No. 0840620 under the Customs Act 1901 applies to individuals or entities that have applied for tariff concessions on certain goods, specifically buses cylinder assemblies in this case. The Act facilitates the application process for tariff concessions, allowing the Chief Executive Officer of Customs to grant lower rates of customs duty on goods specified in a Tariff Concession Order (TCO), provided the application meets the criteria outlined in the Act. This instrument is effective from the date the application was lodged and applies nationally across Australia. The scope of the Act is limited to goods not specified in section 269SJ, which lists goods that cannot be subject to a TCO. There are no reported exclusions or exemptions within this specific instrument, although the overarching Customs Act may include other provisions not directly referenced here. The application of this TCO is further governed by subordinate instruments, which may provide additional clarifications or specific conditions.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically Part XVA, establish the framework for Tariff Concession Orders (TCOs). Section 269F permits an application for a TCO by any person to the Chief Executive Officer of Customs (CEO). If the application pertains to goods not listed in section 269SJ, which are ineligible for a TCO, the CEO must evaluate whether the application meets the core criteria stipulated in section 269C. A TCO application meets these criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Once the CEO determines that the core criteria are satisfied, they are required to issue a written TCO under section 269P(3), specifying that the goods in question are subject to a prescribed tariff item.
The obligations imposed by the Customs Act on parties or entities involve a procedural requirement for applicants to ensure their TCO applications meet the core criteria. The CEO must diligently assess each application, verifying the absence of substitutable goods produced in Australia. Additionally, under section 269K(1), the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed. This ensures transparency and allows for potential objections to be raised. For the case of TCO No. 0840620, the CEO did not receive any submissions, indicating no objections to the concession.
The Act delineates potential consequences for non-compliance with its provisions, although the specific penalties are not detailed in the provided text. Typically, breaches of customs regulations can lead to both civil and criminal penalties, which may include fines and imprisonment depending on the severity of the breach. For instance, section 270 of the Customs Act 1901 generally provides that penalties for breaches can include fines and imprisonment. However, the specific penalties for breaches related to TCOs are not outlined in this particular excerpt. The importance of adhering to the Act's requirements is underscored by the potential for significant legal ramifications if not properly followed.