EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009474
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.
Obrien Glass Industries applied for a TCO in respect of certain bus and or truck and or four wheel drive vehicle parts on 23 February 2010.
Instrument
TCO No 1009474 was made on 14 May 2010. It declares that those certain bus and or truck and or four wheel drive 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. 1009474 is taken to have come into force on 23 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 Instrument No. 1009474, enacted in 2010, is an instrument under the Customs Act 1901, designed to facilitate tariff concessions for certain goods by applying a lower rate of customs duty. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods not specified in section 269SJ, provided that the goods meet the core criteria set out in section 269C, specifically that no substitutable goods are produced in Australia. This instrument was introduced to address the need for more flexible tariff regulations that can accommodate specific economic circumstances and support industries that rely on imported components. The policy objective is to facilitate the import of goods by reducing their customs duty, thereby supporting businesses such as Obrien Glass Industries that rely on importing specific parts for their products.
Scope and Application
The Tariff Concession Instrument No. 1009474, made under the Customs Act 1901, applies to certain bus, truck, and four-wheel-drive vehicle parts by granting a concession on the customs duty rate. The instrument was enacted to benefit O’Brien Glass Industries, who applied for the concession on 23 February 2010. The instrument became effective on the same date, despite being formally made on 14 May 2010, and it does not adversely affect any existing rights or impose liabilities on any party aside from the Commonwealth. This concession reduces the general customs duty rate from 5% to free for the specified goods, provided they meet the criteria of not having substitutable goods produced in Australia in the ordinary course of business. The Chief Executive Officer of Customs must satisfy the core criteria set out in section 269C of the Act before issuing such an order, and any interested party can lodge a submission against the application if they believe the concession should not be granted. In this instance, no such submissions were received, and the instrument was published in the Gazette to allow for this opportunity. The geographic reach of this legislation is national, as it pertains to customs duties across Australia, but it specifically affects only the named goods and the applicant, O’Brien Glass Industries.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1009474 (sections 269C, 269F, and 269P(3) of the Customs Act 1901) establish the conditions under which the Chief Executive Officer of Customs (CEO) can grant a Tariff Concession Order (TCO) that applies a reduced rate of customs duty on specified goods. For instance, section 269F allows an individual to apply for a TCO on goods, provided the goods are not listed in section 269SJ as ineligible. Section 269C specifies the core criteria that must be met, such as the absence of substitutable goods produced in Australia on the day the application is made. If the CEO determines that these criteria are satisfied, section 269P(3) mandates the issuance of a written order, declaring the goods to which the concession applies.
The obligations imposed on the parties governed by this Act include the duty of the CEO to assess applications against the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties who might oppose the TCO. In this specific case, the CEO did not receive any submissions against the application by Obrien Glass Industries, indicating a smooth process without any objections. Additionally, the Act ensures that the TCO does not retroactively affect the rights of any person other than the Commonwealth, safeguarding existing rights and imposing no new liabilities.
In terms of breaches and penalties, the Act does not explicitly outline specific criminal or civil penalties for non-compliance with the TCO provisions. However, general legal principles imply that failure to adhere to the conditions or obligations outlined in the Act could result in legal consequences, including potential civil actions for damages or administrative penalties imposed by the CEO or relevant authorities. The maximum penalties, if any, would be dictated by the broader legal framework governing customs and trade within Australia.
The Act also stipulates that the TCO's commencement date aligns with the date of the application submission, ensuring that any benefits from the tariff concession are effective from that moment. This arrangement benefits importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date, as stipulated under paragraph 126(1)(r) of the Regulations. This provision ensures that the concession does not impose any retroactive liabilities on individuals or entities, maintaining fairness and protecting existing rights.