EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916626
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.
Toyota Tsusho applied for a TCO in respect of certain reduction geared dc motor on 15 May 2009.
Instrument
TCO No 0916626 was made on 07 August 2009. It declares that those certain reduction geared dc motor 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. 0916626 is taken to have come into force on 15 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 Customs Act 1901 was enacted by the Parliament of Australia to provide a comprehensive framework for the administration of customs and excise duties, among other things. The Act allows for the creation of Tariff Concession Orders (TCOs), which can reduce or eliminate customs duties on specified goods, provided certain criteria are met. This legislative instrument, F2010L00035, was introduced to address the specific issue of applying tariff concessions to certain reduction geared DC motors, as requested by Toyota Tsusho. The problem it addresses is the potential economic disadvantage faced by businesses that rely on importing specific goods for which no Australian-made alternatives exist. The policy objective is to facilitate the importation of these goods by reducing or eliminating customs duties, thereby supporting industry competitiveness and consumer access to affordable products. The Tariff Concession Order No. 0916626, made under this Act, provides a tariff concession for the specified reduction geared DC motors, effective from the date of the application, 15 May 2009.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to goods for which an application is made under section 269F, provided the application does not concern goods specified in section 269SJ, which are ineligible for tariff concessions. The scope of the Act includes entities or individuals seeking reduced customs duty rates on specific goods by applying for a TCO, contingent on the absence of substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, and 269E. This legislation has a Commonwealth reach, overseen by the Chief Executive Officer of Customs, who must ensure the application meets the core criteria before issuing a TCO. Once a TCO is issued, it applies retroactively from the date the application was lodged, as per section 269S(1), and benefits importers by allowing them to claim refunds for duties paid on those goods from the effective date of the TCO. The Act does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person under the TCO.
Key Provisions
The Customs Act 1901, particularly Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows individuals to apply for a TCO for specific goods, provided that the goods are not those listed in section 269SJ, which cannot be subject to a TCO. The CEO must assess the application against the core criteria outlined in section 269C. If the application is deemed to meet the core criteria, meaning that no substitutable goods were produced in Australia at the time the application was lodged, the CEO is required to issue a written TCO under section 269P(3).
The obligations imposed on the parties by this legislation are primarily centred on the application process and the CEO's responsibilities. The CEO must review the application to determine if it meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia (section 269C). If the application is accepted, the CEO must issue a TCO and declare the applicable customs duty rate for the specified goods (section 269P(3)). Furthermore, as soon as practicable after accepting a TCO application, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their concerns (subsection 269K(1)). The CEO did not receive any submissions in response to the notice for TCO No. 0916626.
In the case of TCO No. 0916626, the CEO was satisfied that the application for certain reduction geared DC motors met the core criteria, as no substitutable goods were produced in Australia. Consequently, a TCO was issued on 7 August 2009, declaring that the specified goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, instead of the general rate of 5%. The TCO came into force on 15 May 2009, the date the application was lodged (subsection 269S(1)). This TCO does not affect the rights of any person, except the Commonwealth, and does not impose any liabilities on any person in respect of actions taken before the TCO registration date.
Under the Customs Act 1901, breaches of the provisions related to TCOs may result in various consequences. While specific offences and penalties are not detailed in the provided text, the Act generally provides for criminal and civil penalties for breaches of customs laws. These penalties can include fines and imprisonment for individuals, as well as fines for corporations. The exact penalties would depend on the specific breach and the relevant provisions of the Customs Act 1901 and associated regulations.