EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928336
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.
Volvo Commercial Vehicles applied for a TCO in respect of certain articulated buses folding bellows on 05 August 2009.
Instrument
TCO No 0928336 was made on 30 October 2009. It declares that those certain articulated buses folding bellows 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. 0928336 is taken to have come into force on 05 August 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 for the regulation of customs and excise duties. The Act includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. This mechanism was introduced to address the problem of ensuring that Australian industries can remain competitive without being unduly burdened by high import duties on goods that are not produced locally. The policy objective underpinning the use of TCOs is to facilitate the import of goods that are necessary for Australian businesses and consumers, while also encouraging local production by limiting concessionary tariffs to cases where no substitutable goods are produced in Australia. Specifically, TCO No. 0928336, made on 30 October 2009, provides a concession on certain articulated buses folding bellows, reducing the duty rate from 5% to free, reflecting the absence of locally produced substitutable goods and aligning with the legislative intent to support industry competitiveness and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0928336 applies to articulated buses folding bellows as specified by Volvo Commercial Vehicles. This instrument, made under section 269F of the Customs Act 1901, provides a concession on the customs duty for these goods, reducing the rate from 5% to free. The application for this tariff concession order was made on 05 August 2009 and the order itself was made on 30 October 2009 by the Chief Executive Officer of Customs, following a determination that no substitutable goods were produced in Australia. This instrument falls under the jurisdiction of the Commonwealth of Australia and applies to any goods meeting the criteria set out in the application, specifically articulated buses folding bellows. The instrument does not affect the rights of any person other than the Commonwealth, and no liabilities are imposed on any person as a result of its application. Any person may submit objections to the CEO prior to the making of the order, although in this instance, no submissions were received.
Key Provisions
The Tariff Concession Order (TCO) No. 0928336, made under section 269F of the Customs Act 1901 (the Act), pertains to certain articulated buses folding bellows and is detailed in Schedule 4 of the Customs Tariff Act 1995. This TCO was issued on 30 October 2009, declaring that these specific goods are subject to a reduced duty rate of free, as opposed to the general rate of 5% (section 269P(3)). The TCO was effective from 5 August 2009, the date the application was lodged (subsection 269S(1)). This order ensures that the goods in question, which are not produced in Australia, are eligible for the tariff concession, as required by section 269C.
Under the Act, the Chief Executive Officer of Customs (the CEO) must ensure that the application for a TCO meets the core criteria specified in section 269C. This includes verifying that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Volvo Commercial Vehicles' application for this TCO was accepted on this basis. Additionally, the CEO is mandated to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not proceed (subsection 269K(1)). In this case, no objections were received.
The obligations imposed by this legislation on the relevant parties include the requirement for Volvo Commercial Vehicles to ensure that their application for the TCO is thorough and meets the criteria set out in the Act. The CEO, on the other hand, must meticulously evaluate the application against these criteria and publish a notice in the Gazette to allow for public consultation. The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth, as per subsection 269S(2), and that it does not impose any new liabilities.
Breach of the conditions set by the TCO could lead to significant legal repercussions. While the explanatory statement does not explicitly detail the penalties for non-compliance, breaches of the Customs Act generally can result in both civil and criminal penalties. Civil penalties may include fines and, in some cases, the forfeiture of the goods in question. Criminal penalties can extend to imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined in the context of the specific breach and under the relevant sections of the Act.