EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001036
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 internal combustion engine air filters on 07 January 2010.
Instrument
TCO No 1001036 was made on 22 March 2010. It declares that those certain internal combustion engine air filters 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. 1001036 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. 1001036 was enacted in 2010 under the Customs Act 1901 to provide tariff concessions for certain internal combustion engine air filters, aiming to address the need for reduced customs duties on these goods. This legislation was introduced by the Australian Government, specifically through the Chief Executive Officer of Customs, in response to an application from Wesfil Australia. The primary policy objective behind this instrument is to lower the duty on specified goods, enhancing their affordability and competitiveness in the Australian market, while ensuring that no existing legal rights or obligations of non-Commonwealth entities are adversely affected. The instrument effectively provides a free rate of duty on the specified goods, aligning with the broader goal of supporting Australian industries by reducing the financial burden of customs duties.
Scope and Application
The Tariff Concession Instrument No. 1001036, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain internal combustion engine air filters, and it is pertinent to entities or individuals involved in the importation of these goods. The instrument is effective on the date the application for the tariff concession order was lodged, which is 07 January 2010. The instrument is applicable nationally across Australia, reflecting its Commonwealth jurisdiction. It does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person, including the rights of importers who can apply for a refund of duty. The instrument extends or restricts its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed item of the Tariff Schedule applicable to the goods in question. The instrument excludes certain goods that cannot be subject to a tariff concession order as specified in section 269SJ of the Customs Act 1901.
Key Provisions
The main operative sections of the Customs Act 1901, specifically concerning Tariff Concession Orders (TCOs), are sections 269F, 269C, 269B, and 269P (subsection 3). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the application is not in respect of goods specified in section 269SJ, which sets out those goods that cannot be subject to a TCO, the CEO must determine whether the application meets the core criteria. A TCO application meets these criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269C and 269B. If the CEO is satisfied that the application meets the core criteria, they must make a written order (TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a reduced or free rate of duty on these goods.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must apply to the CEO and provide sufficient information for the CEO to determine whether the core criteria are met. The CEO is required to publish a notice in the Gazette, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. The CEO must then review any submissions and make a decision based on the criteria outlined in the Act. Once a TCO is made, the CEO must ensure it is published in the Gazette and that the reduced duty rates apply to the specified goods from the date the application was lodged.
Under the Customs Act 1901, breaches of the provisions related to TCOs can lead to various consequences. While the specific offences and penalties are not detailed in the explanatory statement, generally, any non-compliance with the Act or failure to adhere to the prescribed processes can result in legal action. This may include civil penalties, criminal charges, or both, depending on the nature and severity of the breach. The maximum penalties for breaches of customs-related laws can vary widely, but they may include fines, imprisonment, or both, depending on the specific offence and the discretion of the court.
In summary, the Customs Act 1901, through sections 269F, 269C, 269B, and 269P, provides a framework for the application and implementation of Tariff Concession Orders. These sections mandate that applications be made to the CEO, who must assess them against the core criteria and publish notices inviting submissions. If the criteria are met, the CEO issues a TCO, which takes effect from the date the application was lodged. The Act also implies that non-compliance with its provisions can lead to civil or criminal penalties, although the specific penalties are not outlined in the explanatory statement.