EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930292
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain vehicle roof racks on 18 August 2009.
Instrument
TCO No 0930292 was made on 13 November 2009. It declares that those certain vehicle roof racks 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. 0930292 is taken to have come into force on 18 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 Australian Parliament, provides a framework for the administration of customs and excise. One of its significant components is Part XVA, which facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for reduced customs duty rates on specified goods. The primary problem or gap this legislation addresses is the need for flexibility in tariff rates to support specific economic needs or to address situations where goods are not produced domestically. This ensures that businesses and consumers benefit from more favourable tariff rates under certain conditions. The objective is to promote economic efficiency by reducing the cost of imported goods, thereby supporting trade and commerce.
The Tariff Concession Instrument No. 0930292, issued on 13 November 2009, exemplifies the application of these provisions. In this instance, Super Cheap Auto Pty Ltd applied for a TCO for certain vehicle roof racks. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a concession. Consequently, the TCO granted a free rate of duty on these goods, down from the general rate of 5%. The process involved public consultation, with no submissions received against the concession, and the TCO came into force on the date of the application, 18 August 2009. This instrument ensures that the rights of importers are positively affected, potentially allowing for duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0930292, facilitates the application of lower rates of customs duty on certain imported goods, specifically vehicle roof racks in this case. This legislation applies to the Chief Executive Officer of Customs (CEO) who is responsible for assessing and approving applications for Tariff Concession Orders (TCO) under section 269F. The CEO must ensure that the application meets the core criteria specified in sections 269C, 269D, and 269E, particularly verifying that no substitutable goods are produced in Australia. Once the CEO is satisfied that the application meets these criteria, they are mandated to issue a TCO, thereby applying a prescribed tariff rate to the specified goods. The application process also requires the CEO to publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no objections were received. The TCO itself is retroactive to the date of the application, in this case, 18 August 2009, and does not affect the rights of any person other than the Commonwealth, ensuring that no individual or entity is disadvantaged or subject to new liabilities concerning actions taken prior to the TCO’s effective date.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) as relevant to Tariff Concession Orders (TCOs) include sections 269C (subsection 269P(3)), 269B, 269D, 269E, 269F, 269SJ, and 269K(1). These sections outline the criteria for making a TCO application, the requirements for the Chief Executive Officer of Customs (the CEO) to consider such applications, and the process for publishing and implementing these orders. Specifically, section 269F allows a person to apply for a TCO in respect of goods, while section 269C mandates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from interested parties if a TCO application is accepted.
The obligations and requirements imposed by the Act on the parties involved primarily concern the CEO and applicants for TCOs. The CEO must ensure that any TCO application that does not pertain to goods specified in section 269SJ of the Act is assessed against the core criteria outlined in sections 269C and 269B. This includes determining whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any person who believes the TCO should not be made. Failure to meet these obligations could result in legal challenges regarding the validity of the TCO.
Under the Customs Act 1901, breaches of the requirements or obligations related to TCOs may result in civil or criminal consequences. However, the explanatory statement does not specify any particular offences or penalties for failing to comply with the provisions related to TCOs. Instead, the focus is on ensuring that the process for granting TCOs is transparent and fair, with adequate opportunity for public input. The primary enforcement mechanism appears to be the legal recourse available to any person who believes a TCO should not be made, as outlined in the Act. This may include challenging the validity of the TCO in court if the CEO fails to follow the prescribed process or criteria.
In summary, the Customs Act 1901 provides a framework for the creation of Tariff Concession Orders through sections 269C, 269F, 269K(1), and others. The CEO is responsible for assessing applications against the core criteria and ensuring the process is transparent. While the explanatory statement does not detail specific penalties for non-compliance, the Act provides avenues for legal challenge if the process is not followed correctly. This structure aims to balance the interests of applicants, the public, and the government in regulating customs duties effectively.