EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912630
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.
Get a Grip Tyres Pty Ltd applied for a TCO in respect of certain bus and/or truck tyres on 16 April 2009.
Instrument
TCO No 0912630 was made on 30 September 2009. It declares that those certain bus and/or truck tyres 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 10%. 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. One submission objecting to the TCO application was received from Bridgestone Australia Ltd.
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. 0912630 is taken to have come into force on 16 April 2009.
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, as amended, includes provisions under Part XVA for the creation of Tariff Concession Orders (TCOs) which can reduce the rate of customs duty on certain goods. Enacted by the Commonwealth Parliament, the Act was introduced to address the need for a flexible mechanism to provide tariff relief on goods that are not produced domestically or where there is a compelling case for reduced duty. The primary policy objective is to facilitate the importation of goods that would otherwise be subject to high duties, thereby potentially lowering costs for businesses and consumers, and encouraging competition and efficiency within the Australian market. Instrument No. 0912630, which was made on 30 September 2009, is an example of this mechanism in action, where the CEO of Customs granted a concession on certain bus and/or truck tyres, setting their duty rate to free, following an application by Get a Grip Tyres Pty Ltd. This decision was made after considering objections and determining that no substitutable goods were produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0912630 under the Customs Act 1901 applies to individuals or entities that have made an application for tariff concession orders (TCOs) concerning specific goods, namely certain bus and/or truck tyres, which in this instance was Get a Grip Tyres Pty Ltd. The application process and subsequent concession, as outlined in Part XVA of the Act, requires that the Chief Executive Officer of Customs (CEO) must be satisfied that no substitutable goods are produced in Australia, thereby meeting the core criteria set out in sections 269C and 269D of the Act. Once the CEO is satisfied, a written order is made, granting the tariff concession. This particular TCO, effective from 16 April 2009, reduces the duty on the specified tyres from a general rate of 10% to free, thereby benefiting importers who can apply for a refund of duty on goods imported since the TCO's effective date. The instrument extends across the Commonwealth, with its jurisdictional reach dictated by the national scope of the Customs Act 1901. There are no stated exclusions or exemptions in this particular TCO, and it does not affect the rights of any person other than the Commonwealth. The application of this legislation can be further refined or extended through subordinate instruments, although this specific TCO does not impose any additional liabilities on any person.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0912630 under the Customs Act 1901 (sections 269C, 269F, 269K, and 269P) establish the framework for the creation and implementation of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods, while section 269C requires the CEO to ensure that no substitutable goods are produced in Australia at the time of the application. If these criteria are met, section 269P mandates that the CEO must issue a written order, the TCO, declaring that the goods in question will be subject to a lower rate of customs duty as specified in the Customs Tariff Act 1995. Section 269K further requires that the CEO must publish a notice in the Gazette, inviting objections to the TCO application, as soon as practicable after accepting it as valid.
The Act imposes several obligations on the parties involved. The applicant, in this case Get a Grip Tyres Pty Ltd, must ensure their application meets the core criteria by demonstrating that no substitutable goods are produced in Australia. The CEO is required to verify these criteria and publish a notice inviting objections, as stipulated in section 269K. Once a TCO is issued, it becomes effective from the date the application was lodged, as outlined in section 269S. The CEO must also ensure that the TCO does not affect the rights of any person other than the Commonwealth, as per section 269S(1).
The Act delineates certain offences and consequences for non-compliance. Under section 269M, any person who knowingly or recklessly makes a false or misleading statement in an application for a TCO commits an offence and is liable to a penalty. The maximum penalty for such an offence is set out in the Customs Act 1901, but it is not specified in this particular Explanatory Statement. Additionally, any person who imports goods subject to a TCO after its effective date but before its registration must adhere to the new duty rates as specified in the TCO. Failure to do so may result in financial penalties or other legal consequences.
In summary, the Tariff Concession Instrument No. 0912630 establishes a structured process for applying and granting tariff concessions on specified goods, ensuring that the process is transparent and includes opportunities for public objection. The obligations of the applicant and the CEO are clearly defined, while the potential legal ramifications for non-compliance are also outlined, though specific penalties are not detailed in this particular Explanatory Statement.