EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001034
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.
Robert Bosh Aust Pty Ltd applied for a TCO in respect of certain passenger motor vehicle parts on 07 January 2010.
Instrument
TCO No 1001034 was made on 22 March 2010. It declares that those certain passenger motor vehicle parts 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. 1001034 is taken to have come into force on 07 January 2010.
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 and excise duties. The Act provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced customs duties to specified goods. The problem or gap addressed by this legislation was the need for a streamlined process to grant tariff concessions for certain imported goods under specific circumstances. Tariff Concession Instrument No. 1001034, made under the authority of the Customs Act 1901, was introduced to provide a tariff concession for certain passenger motor vehicle parts, thereby facilitating their importation at a reduced duty rate. This instrument was enacted to ensure that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. The policy objective of the TCO is to encourage the importation of specified goods by reducing their customs duty rates, thus benefiting importers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for reduced rates of customs duty on certain goods, provided the application for the concession meets specific criteria outlined in the Act. An application for a TCO can be made by any person regarding goods, provided these goods are not those specifically excluded under section 269SJ of the Act. The core criteria for a TCO application to be considered valid include the absence of substitutable goods produced in Australia in the ordinary course of business on the date the application was lodged. This is defined further by sections 269C, 269D, 269E, and 269F of the Act, which detail the production of goods in Australia, the ordinary course of business, and what constitutes substitutable goods. If the CEO is satisfied that the application meets these criteria, a TCO is issued, effectively applying a prescribed duty rate from the Customs Tariff Act 1995 to the specified goods. For instance, TCO No. 1001034, issued on 22 March 2010, pertains to certain passenger motor vehicle parts, reducing their duty rate to free from the general rate of 5%. This order was made following an application by Robert Bosh Aust Pty Ltd on 07 January 2010, and it came into force on that date. The Act mandates the CEO to publish a notice in the Gazette to invite objections to a TCO application, though no submissions were received in this case.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1001034 are outlined within sections 269C, 269F, 269K, 269P, and 269S of the Customs Act 1901. Section 269F allows for the application for a Tariff Concession Order (TCO) by any person seeking lower customs duty rates for specified goods, as long as these goods do not fall under the restricted category outlined in section 269SJ. The CEO is required to assess whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia as per section 269C. If satisfied, the CEO must make a written order under section 269P(3). Furthermore, section 269K mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. The TCO is deemed to have come into force on the date the application was lodged, as specified in section 269S(1).
The Act imposes several obligations on the parties involved. For the applicant, the primary obligation is to ensure that the application for a TCO is made in accordance with the provisions of the Customs Act 1901, particularly under section 269F. The CEO, on the other hand, must review the application to ascertain whether it meets the core criteria set out in section 269C. If the criteria are met, the CEO must issue a TCO as stipulated in section 269P(3). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on the application, as required by section 269K(1). In this case, no submissions were received, which could imply that the TCO was uncontested.
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. However, the explanatory statement does not explicitly mention any offences or penalties related to breaches of the Act in the context of this specific TCO. It is essential to refer to other sections of the Customs Act and associated regulations for information on penalties. For instance, section 244 of the Customs Act outlines various penalties for contraventions, including fines and imprisonment, depending on the severity of the offence.
In summary, Tariff Concession Instrument No. 1001034 provides a framework for reducing customs duties on certain passenger motor vehicle parts under specific conditions. The primary obligations lie with the applicant to ensure compliance with the Act and the CEO to assess applications and make appropriate orders. While the explanatory statement does not detail specific penalties for breaches, general penalties are outlined in other sections of the Customs Act 1901.