EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947676
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.
ZF Lemforder Pty Ltd applied for a TCO in respect of certain wheel speed sensors on 07 December 2009.
Instrument
TCO No 0947676 was made on 26 February 2010. It declares that those certain wheel speed sensors 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. 0947676 is taken to have come into force on 07 December 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 was amended by the Tariff Concession Instrument No. 0947676 enacted in 2010, introducing a specific procedure for applying for tariff concessions on imported goods. This legislative instrument was designed to address the gap in the existing customs duty framework by allowing the Chief Executive Officer of Customs to grant tariff concessions on goods not produced in Australia, provided certain criteria are met. This process aims to facilitate easier access to imported goods that are not domestically manufactured, thereby potentially reducing costs for importers and benefiting consumers. The instrument was enacted by the relevant legislature, with the policy objective of ensuring that the tariff concessions do not disadvantage any person and do not impose new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs), provides a framework for reducing customs duty on certain goods, enhancing their affordability and competitiveness. Specifically, this legislation applies to individuals or entities that seek a tariff concession for specific goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The Act allows the Chief Executive Officer of Customs to grant these concessions, which become effective from the date the application is lodged. The scope of this Act extends to all industries and types of goods, except those explicitly excluded by section 269SJ of the Act, and it operates nationally within Australia. The instrument in question, TCO No. 0947676, pertains to certain wheel speed sensors and was implemented to provide a duty-free status on these goods, effective from 7 December 2009. Importantly, this TCO does not retroactively disadvantage any parties or impose liabilities on them, ensuring that only future transactions benefit from the reduced duty rates.
Key Provisions
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. When a person applies for a TCO under section 269F, the CEO evaluates whether the application meets the core criteria set out in section 269C. This criterion requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
Entities applying for a TCO must ensure their application complies with the core criteria outlined in the Customs Act. This involves demonstrating that the goods in question are not substitutable by any goods produced in Australia. For instance, in the case of TCO No. 0947676, ZF Lemforder Pty Ltd applied for tariff concessions on certain wheel speed sensors, and the CEO determined that no substitutable goods were produced in Australia, thus satisfying the criteria. This determination led to the TCO being issued, reducing the duty rate on these sensors from the general rate of 5% to free.
Upon acceptance of a TCO application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections. In the case of TCO No. 0947676, no submissions were received. The TCO is deemed to have come into force on the date the application was lodged, which in this instance was 07 December 2009. This means that any rights of persons other than the Commonwealth are protected, and no new liabilities are imposed retroactively. Importers of the goods can benefit from the TCO by applying for a refund of duty paid on imports since the effective date of the TCO.
The Act does not specify any direct offences, penalties, or consequences for breaching the provisions related to TCOs. However, any misuse or fraudulent claims regarding TCOs could potentially lead to other legal issues, such as those under general administrative law or specific customs regulations. The primary focus of the Act in this context is to ensure that the tariff concession process is transparent and properly applied, rather than detailing penal consequences for non-compliance with the TCO provisions themselves.