EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008324
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.
Kumho Australia Pty Ltd applied for a TCO in respect of certain motor car tyres on 16 February 2010.
Instrument
TCO No 1008324 was made on 15 July 2010. It declares that those certain motor car tyres 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. 1008324 is taken to have come into force on 16 February 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 Order No. 1008324, made under the Customs Act 1901, was enacted in 2010 to address a gap in tariff concessions for certain imported goods. This legislative instrument facilitates tariff reductions for specific goods, in this case, certain motor car tyres, which are now subject to a zero rate of duty instead of the general 5% rate. The primary objective of this measure is to provide economic benefits to importers by reducing the cost of these goods, thereby potentially enhancing their competitiveness in the Australian market. The instrument was created following an application by Kumho Australia Pty Ltd and after the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for tariff concessions. The order came into effect on the date of the application, 16 February 2010, and does not disadvantage any person or impose new liabilities, while also allowing importers to apply for refunds of duty paid on these goods since the effective date.
Scope and Application
The Tariff Concession Instrument No. 1008324, issued under the Customs Act 1901, applies to specific goods identified in the instrument, namely certain motor car tyres, which are subject to a concessionary rate of customs duty. The instrument is applicable to the entity that applied for the concession, Kumho Australia Pty Ltd, and potentially to any other entity importing similar goods post the issuance of the instrument. The scope of the Act extends to goods for which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, provided they do not fall under the list of goods specified in section 269SJ that are ineligible for such concessions. The application of this Act is nationwide as it pertains to the Commonwealth of Australia, and its purpose is to facilitate the importation of goods by reducing customs duty rates under certain conditions. The Act does not specify exclusions or thresholds apart from those outlined in section 269SJ, and its application may be further detailed or amended through subordinate instruments as necessary.
Key Provisions
The main operative sections of this legislation (sections 269C, 269P, and 269K) detail the process by which Tariff Concession Orders (TCOs) can be granted, what constitutes a TCO application meeting the core criteria, and the requirements for publication and consultation following the acceptance of an application. Specifically, section 269C requires that an application for a TCO will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, they must make a written order (a TCO) specifying the goods and the applicable prescribed item of Schedule 4 to the Customs Tariff Act 1995. Finally, section 269K requires the CEO to publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not proceed. In this case, no submissions were received.
The obligations imposed by this legislation on parties or entities it governs include the requirement for the CEO of Customs to rigorously assess TCO applications against the specified criteria. The CEO must also ensure that an appropriate public consultation process is conducted, which involves publishing a notice in the Gazette. This notice must include an invitation for submissions from any person who believes there are reasons why the TCO should not be granted. Additionally, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) in a way that disadvantages them or imposes liabilities for actions taken prior to the TCO coming into effect.
The legislation provides for potential offences and penalties for breaches, though specific penalties are not outlined within the text. The general legal framework under which this TCO operates suggests that any breaches of the conditions under which the TCO is granted, or any fraudulent activities related to the importation of the concessioned goods, could lead to criminal or civil consequences. Such consequences might include fines or imprisonment for individuals found guilty of breaches, and penalties for entities could involve substantial financial penalties or other enforcement actions deemed necessary by the relevant authorities. The specifics of these penalties would be determined by the broader legal context and applicable laws.