EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925267
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.
Cheap Auto applied for a TCO in respect of certain jockey wheels on 16 July 2009.
Instrument
TCO No 0925267 was made on 25 September 2009. It declares that those certain jockey wheels 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. 0925267 is taken to have come into force on 16 July 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, enacted by the Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These TCOs allow for a reduced rate of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0925267, issued under this Act, was introduced to address the need for tariff concessions in specific cases, as demonstrated by Cheap Auto’s application for jockey wheels on 16 July 2009. The instrument declares that these jockey wheels are subject to a zero percent duty rate, differing from the general rate of 5 percent. This order aims to ensure that the rights of importers are positively impacted without imposing any new liabilities or disadvantaging any parties, as per the provisions outlined in the Customs Act 1901.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities seeking to import goods that qualify for tariff concessions. The scope of the Act encompasses any goods for which an applicant can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, thereby meeting the core criteria stipulated in section 269C of the Act. The geographic reach of this Act is national, given its basis in Commonwealth legislation, which applies across all states and territories of Australia. The Act includes exclusions for goods specified in section 269SJ, which cannot be subject to a TCO. The application process for a TCO requires publication in the Gazette, inviting public submissions, although no submissions were received for TCO No. 0925267. The commencement date of a TCO is the date the application was lodged, and in this instance, TCO No. 0925267 is deemed to have come into force on 16 July 2009. This TCO provides tariff relief for certain jockey wheels, effectively reducing the duty from 5% to free, and it does not disadvantage or impose liabilities on any person other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0925267 under the Customs Act 1901 (the Act) provides the framework for the consideration and granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO). Section 269F of the Act allows an individual or entity to apply to the CEO for a TCO in respect of specific goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO, the application is assessed against the core criteria set out in section 269C. This section stipulates that a TCO application meets the criteria if, on the date the application is submitted, no substitutable goods are produced in Australia in the ordinary course of business. Definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
The obligations imposed on the parties or entities governed by this Act involve several procedural steps. Firstly, the CEO must ensure that any TCO application is not in relation to goods specified in section 269SJ of the Act. Once the CEO verifies this, they must assess whether the application meets the core criteria outlined in section 269C. This involves confirming that no substitutable goods are produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette, as per subsection 269K(1), inviting any interested parties to submit objections or submissions against the proposed TCO. The CEO must consider these submissions before making a decision. If no submissions are received, the CEO proceeds to make the TCO.
The Act outlines specific consequences for non-compliance with its provisions. Although the explanatory statement does not detail specific offences or penalties under this particular TCO, the general framework of the Customs Act 1901 implies that breaches could result in civil or criminal penalties. These penalties might include fines or imprisonment, depending on the severity and nature of the breach. The maximum penalties for breaches of customs laws can vary, but they are typically significant, reflecting the seriousness with which customs regulations are enforced.
In summary, the Tariff Concession Instrument No. 0925267 provides a streamlined process for applying for and obtaining TCOs under the Customs Act 1901. The CEO is tasked with evaluating applications against specific criteria and considering any submissions from interested parties. The rights of importers are protected, and the TCO does not impose any liabilities on any person. Non-compliance with the Act’s provisions could lead to civil or criminal penalties, although the specific penalties are not detailed in this explanatory statement.