EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0921923
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.
Kumho Australia applied for a TCO in respect of certain tyres buses and or lorries on 26 June 2009.
Instrument
TCO No 0921923 was made on 12 November 2009. It declares that those certain tyres buses and or lorries 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. 0921923 is taken to have come into force on 26 June 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 to facilitate the regulation of customs and excise duties, providing a framework for the administration of international trade and border control in Australia. This Act was introduced to address the need for a structured approach to customs duties and related regulations, ensuring efficient and fair trade practices. The Tariff Concession Instrument No. 0921923, introduced under the Customs Act, aims to provide relief to businesses by offering tariff concessions on certain goods. This particular instrument was enacted to address the issue of high customs duties on specific goods, in this case tyres for buses and lorries, by applying a zero duty rate instead of the standard 5%. The instrument was made by the Chief Executive Officer of Customs, following an application by Kumho Australia, and was published in the Gazette to allow for public consultation, although no submissions were received. The policy objective of this instrument is to reduce the financial burden on importers and businesses, facilitating smoother trade operations and potentially boosting economic activity by lowering the cost of essential goods.
Scope and Application
The Tariff Concession Instrument No. 0921923 under the Customs Act 1901 applies to the goods specified in the application submitted by Kumho Australia, namely certain tyres for buses and lorries. The instrument is applicable to the entities involved in the importation of these goods, as it modifies the customs duty rate from the general rate to a concessional rate of free, provided the application meets the core criteria outlined in the Act. This instrument is a Commonwealth measure, extending its jurisdictional reach across Australia. It is important to note that this TCO does not apply to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The application process and the issuance of such orders may be further regulated or detailed through subordinate instruments, although this particular TCO does not impose any additional liabilities or affect existing rights adversely as it comes into force on the date the application was lodged.
Key Provisions
The primary sections of this legislation, specifically Section 269F of the Customs Act 1901, allow for the application of Tariff Concession Orders (TCOs) for certain goods. A TCO can be applied for by any person who wishes to have a lower rate of customs duty applied to specific goods, provided those goods are not listed in Section 269SJ, which details goods that cannot be subject to a TCO. The Chief Executive Officer of Customs (CEO) must assess whether the application meets the core criteria, which are detailed in Sections 269B and 269C. If the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must proceed to make the TCO. A written order will be issued, as outlined in Subsection 269P(3), specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must ensure that the application is valid and not in respect of goods specified in Section 269SJ. The CEO must then assess the application against the core criteria, ensuring no substitutable goods were produced in Australia. If the criteria are met, the CEO must make a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as per Subsection 269K(1). This ensures transparency and allows for any objections to be considered.
There are potential consequences for non-compliance with the provisions of the Customs Act 1901 and the TCO regulations. While specific offences and penalties are not detailed in the provided text, it is understood that breaches of customs laws can lead to both civil and criminal penalties. These penalties can include fines and imprisonment, depending on the severity of the breach. The exact penalties would be determined by the relevant courts and the specific circumstances of the case. The act also ensures that the rights of importers are protected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.