EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940026
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 Motor Corporation Pty Ltd applied for a TCO in respect of certain motor vehicle electrical junction boxes on 23 October 2009.
Instrument
TCO No 0940026 was made on 08 January 2010. It declares that those certain motor vehicle electrical junction boxes 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. 0940026 is taken to have come into force on 23 October 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 regulation of imports and exports, including the imposition of customs duties on goods. One specific provision within this Act is Part XVA, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that can reduce the rate of customs duty on certain goods. The aim of this legislative mechanism is to address economic and trade policy objectives by providing relief to importers when specified goods are not produced domestically, thus potentially lowering costs and increasing competitiveness. The explanatory statement for Tariff Concession Instrument No. 0940026, made under this Act, clarifies the process and criteria for such concessions, ensuring that the policy objectives of fostering trade and economic efficiency are met.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs), facilitates the application for tariff concessions on specific goods by allowing the Chief Executive Officer of Customs (CEO) to implement a lower rate of customs duty on goods that meet specified criteria. This legislation applies to any person or entity that wishes to import goods into Australia and can benefit from a tariff concession, provided the goods are not specified in section 269SJ of the Act and do not have substitutable goods produced in Australia. The geographic reach of this Act is national, impacting all jurisdictions within Australia. The TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person in respect of actions taken prior to the TCO's registration. The CEO must publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received for TCO No. 0940026. This particular TCO, which came into effect on 23 October 2009, pertains to certain motor vehicle electrical junction boxes, providing them with a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this TCO is further extended and defined through subordinate instruments, ensuring its effective implementation.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0940026 under the Customs Act 1901 (the Act) relate to the process of granting tariff concessions on certain goods. Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria specified in section 269C, they must issue a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular TCO, No. 0940026, applies to certain motor vehicle electrical junction boxes, granting them a duty-free status as per item 50 of Schedule 4 to the Tariff.
The Act imposes certain obligations on the parties involved in the TCO process. The CEO must ensure that no substitutable goods are being produced in Australia when considering a TCO application. If the CEO is satisfied that the application meets the core criteria, they must issue the TCO. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO. In this instance, the CEO did not receive any submissions.
In terms of consequences for non-compliance, the Act does not explicitly outline criminal or civil penalties for breaches related to TCOs. However, failure to comply with the terms of a TCO or any other obligations under the Customs Act 1901 could potentially lead to legal consequences under other provisions of the Act. For instance, incorrect declarations or fraudulent activities in customs matters may attract penalties under sections such as 234A, which deals with false statements or documents, and could result in fines or imprisonment depending on the severity of the offence. The specific penalties for breaches related to TCOs would depend on the context and nature of the breach, as well as any relevant provisions within the broader Customs Act 1901.