EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915498
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.
Impco Technologies Pty Ltd applied for a TCO in respect of certain transfer line system motor vehicle on 07 May 2009.
Instrument
TCO No 0915498 was made on 31 July 2009. It declares that those certain transfer line system motor vehicle 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. 0915498 is taken to have come into force on 07 May 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 Tariff Concession Instrument No. 0915498, enacted in 2009 under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods, in this case, certain transfer line system motor vehicles. The Customs Act 1901, enacted by the Commonwealth Parliament, facilitates the establishment of tariff concession orders (TCOs) through the Chief Executive Officer of Customs, to provide reduced customs duties on eligible goods. This instrument was introduced to provide relief to importers of the specified goods by granting them a concession that effectively reduces their duty rate from the general rate of 5% to free, provided no substitutable goods were produced in Australia at the time of application. The policy objective is to support the import and use of these specific goods by making them more affordable, thereby potentially stimulating economic activity related to these imports.
Scope and Application
The Tariff Concession Instrument No. 0915498, made under the Customs Act 1901, applies to specific transfer line system motor vehicles as designated by the instrument. This legislation pertains to the application process for tariff concession orders (TCOs) initiated by entities or individuals seeking a reduction in customs duty on goods not produced domestically. The instrument was issued following an application by Impco Technologies Pty Ltd on 07 May 2009, and it came into effect on the same date. The application process involves the Chief Executive Officer of Customs determining whether the goods in question meet the core criteria, specifically whether there are no substitutable goods produced in Australia. The instrument declares that these particular motor vehicles are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively setting the duty rate at free, whereas the general duty rate is 5%. The instrument extends to the Commonwealth jurisdiction and does not disadvantage any person or impose liabilities on any person regarding actions taken prior to its registration. Importers of the specified goods may benefit from the instrument by applying for a refund of duty paid on imports since the effective date of the instrument.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0915498, as outlined in the Customs Act 1901, are sections 269C, 269B, 269E, 269F, 269P, and 269K. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), provided the goods in question are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria (section 269C), a TCO can be made. This involves confirming that no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269B and 269E. Section 269P(3) mandates that if the application meets these criteria, the CEO must issue a written order declaring the goods subject to the TCO. This instrument specifically applies to certain transfer line system motor vehicles, which are now subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved, particularly the CEO, include ensuring that any application for a TCO is assessed against the core criteria specified in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes the TCO should not be made to lodge a submission. In the case of TCO No. 0915498, no submissions were received. The Act also mandates that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the date of registration. Importers of the affected goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 and the Tariff Concession Instrument No. 0915498 may result in various civil or criminal consequences, although the explanatory statement does not detail specific offences or penalties. The Act generally provides for penalties for breaches of customs regulations, which could include fines and imprisonment. For example, section 260-25 of the Customs Act 1901 provides for fines and imprisonment for false statements or documents submitted to Customs. However, the explanatory statement for this specific TCO does not outline specific penalties or consequences for non-compliance with the TCO provisions.