EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001035
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.
Wesfil Australia applied for a TCO in respect of certain motor vehicle rubber wiper blade refills on 07 January 2010.
Instrument
TCO No 1001035 was made on 07 April 2010. It declares that those certain motor vehicle rubber wiper blade refills 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. 1001035 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 Tariff Concession Instrument No. 1001035 was enacted under the Customs Act 1901 to address the issue of tariff concessions for certain goods, in this case, motor vehicle rubber wiper blade refills. This instrument was introduced to provide relief to businesses by reducing or eliminating customs duties on specific goods, thereby making these goods more competitively priced in the Australian market. The Customs Act 1901, administered by the Parliament of Australia, allows the Chief Executive Officer of Customs to make Tariff Concession Orders if certain criteria are met, such as the absence of substitutable goods being produced in Australia. The primary policy objective of this legislation is to support Australian businesses by reducing the cost of imported goods, thereby promoting fair trade and economic efficiency.
The Tariff Concession Order No. 1001035, which came into effect on 7 January 2010, was issued in response to an application by Wesfil Australia. The order declares that the specified motor vehicle rubber wiper blade refills are subject to a free rate of duty, as opposed to the general rate of 5%. This decision was made after it was determined that no substitutable goods were produced in Australia at the time of the application. The order was published in the Gazette, inviting any interested parties to submit objections; however, no objections were received. This instrument ensures that the rights of importers are positively affected, allowing them to apply for refunds of duties paid on goods imported since the effective date of the order.
Scope and Application
The Tariff Concession Instrument No. 1001035 under the Customs Act 1901 applies to specific goods, in this case, certain motor vehicle rubber wiper blade refills, which Wesfil Australia sought to have tariff concessions for. The legislation allows for the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) if an application is made and if the core criteria are met, namely, that no substitutable goods are produced in Australia in the ordinary course of business. The instrument provides a reduced rate of customs duty, from the general rate of 5% to free, for the specified goods. The application of this Act is national, given that it is a Commonwealth instrument under the Customs Act 1901. There are no stated exclusions or exemptions in this specific TCO, but the general exclusions applicable under section 269SJ of the Act would apply. The Act allows for the extension or restriction of application through subordinate instruments, as evidenced by this TCO, which provides specific tariff concessions for the goods in question.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Tariff Concession Orders (TCOs), are found in sections 269C, 269F, 269SJ, and 269P. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO concerning goods. If the CEO is satisfied that the application meets the core criteria as outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business, a TCO is issued. Section 269SJ specifies the types of goods that cannot be the subject of a TCO, while section 269P mandates that if the application meets the criteria, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on parties or entities include the requirement for applicants to ensure their applications meet the core criteria set out in section 269C. The CEO must assess applications to determine if they satisfy these criteria, which include verifying that no substitutable goods were produced in Australia in the ordinary course of business. Additionally, the CEO is mandated by subsection 269K(1) to publish a notice in the Gazette inviting submissions from any person who may oppose the TCO. The CEO must then consider any submissions received before making a decision. The Act also requires that TCOs do not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's effective date.
Breaches of the provisions under the Customs Act 1901 can lead to both civil and criminal consequences. For example, if a person knowingly makes a false statement in an application for a TCO, they may be subject to a penalty of up to $22,200 or imprisonment for up to two years, or both, under section 269R of the Act. Furthermore, if a person is found to have imported goods without the proper tariff concessions or to have evaded duty, they may face fines and other penalties as specified in the Customs Act and associated regulations. The maximum penalties can vary depending on the specific nature of the offence, but they are designed to enforce compliance with the Act's requirements and protect the integrity of the customs duty system.