EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940349
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.
Petrolube International Pty Ltd applied for a TCO in respect of certain brake linings on 27 October 2009.
Instrument
TCO No 0940349 was made on 08 January 2010. It declares that those certain brake linings 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. 0940349 is taken to have come into force on 27 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 Parliament of Australia, established a framework for the administration of customs duties and tariffs, among other things. One of the provisions of the Act is the ability to grant tariff concessions on certain goods, which can be applied for by interested parties. The Tariff Concession Order (TCO) No. 0940349, made under the authority of the Customs Act 1901, addresses the problem of ensuring that Australian businesses and consumers have access to competitively priced imported goods where there are no domestically produced alternatives. This TCO, which was published in the Gazette on 27 October 2009 and came into force on the same date, was introduced to grant a tariff concession on certain brake linings, reducing their duty rate from 5% to free. The objective of this TCO, as per the Customs Act 1901, is to provide tariff relief for goods where there are no substitutable goods produced in Australia, thus supporting fair competition and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0940349 under the Customs Act 1901 applies specifically to the concession of customs duty on certain brake linings as applied for by Petrolube International Pty Ltd. This Act, administered by the Chief Executive Officer of Customs (CEO), pertains to the granting of Tariff Concession Orders (TCOs) to goods that meet specific criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. The instrument operates within the Commonwealth jurisdiction, affecting the importation of the specified goods by reducing their customs duty rate to free, whereas the general rate is 5%. The TCO does not affect existing rights or impose liabilities on any person, other than the Commonwealth, regarding activities conducted prior to its registration. The commencement date of this TCO is the day the application was lodged, which is 27 October 2009. No submissions were received in response to the publication of the application in the Gazette, indicating that no objections were raised regarding the issuance of the concession.
Key Provisions
The Tariff Concession Instrument No. 0940349, made under the Customs Act 1901 (the Act), specifies key provisions concerning the application and approval of Tariff Concession Orders (TCOs) (s 269C). This particular TCO, issued on 8 January 2010, relates to certain brake linings and declares that these goods are subject to a free rate of duty, as opposed to the general rate of 5% (s 269P(3)). This tariff concession applies from the date the application was lodged, 27 October 2009 (s 269S(1)).
The obligations imposed by the Act on parties such as the Chief Executive Officer of Customs (the CEO) include ensuring that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO (s 269F). Furthermore, the CEO must determine whether the application meets the core criteria outlined in section 269C, which stipulates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269B, 269C, 269D, 269E). If the CEO is satisfied that the application meets these criteria, a written order must be made declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (s 269P(3)).
The Act also mandates that the CEO publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (s 269K(1)). In this case, no submissions were received in response to this invitation. Additionally, the TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration in a way that would disadvantage that person or impose liabilities for anything done or omitted before the registration date (s 269S(2)).
Offences under the Customs Act 1901 related to the misuse of TCOs could result in both civil and criminal penalties. However, the specific penalties are not detailed in the provided explanatory statement. Generally, under Australian law, breaches of customs regulations can result in fines and imprisonment, with the exact penalties depending on the nature and severity of the breach. The Act may also provide for additional administrative penalties, such as the imposition of duty or the confiscation of goods.