EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1013771
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.
Saferides Pty Ltd applied for a TCO in respect of certain bus or lorry tyres on 01 May 2010.
Instrument
TCO No 1013771 was made on 11 June 2010. It declares that those certain bus or lorry 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. 1013771 is taken to have come into force on 01 May 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 was enacted by the Parliament of Australia to regulate the import and export of goods and to provide for related matters. A significant feature of this Act is Part XVA, which establishes a framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs. These orders allow for a reduction in the rate of customs duty on specified goods. The problem this legislation addresses is the need to provide tariff relief for imported goods that are not produced domestically or are not readily substitutable by locally produced goods. This is intended to support industries by making imported goods more competitively priced and to benefit consumers through lower prices. The objective is to ensure that the application of these concessions is carefully considered and does not unfairly disadvantage existing domestic industries or consumers.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling the application of a lower rate of customs duty on specified goods. The Act applies to any person or entity seeking to import goods into Australia, provided these goods meet the criteria outlined in section 269C, specifically, that no substitutable goods are produced in Australia in the ordinary course of business. The Act’s jurisdictional reach is national, operating under the authority of the Commonwealth, though it impacts state and territory entities involved in the importation process. The application of a TCO is contingent upon satisfying the core criteria, which includes ensuring the goods in question are not specified in section 269SJ as ineligible for tariff concessions. The application process involves public consultation, as mandated by subsection 269K(1), although no submissions were received for TCO No. 1013771 concerning certain bus or lorry tyres. This order, which came into force on the date of application, 01 May 2010, provides a duty-free rate for these tyres, effective from that date, and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 1013771 under the Customs Act 1901 primarily serves to reduce or eliminate customs duty on specific goods, in this case, certain bus or lorry tyres, through a Tariff Concession Order (TCO). Section 269F (1) allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. Upon receiving an application, the CEO must assess if it meets the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia at the time the application is lodged. If the CEO is satisfied that the application meets these criteria, a TCO is issued under section 269P(3), specifying the lower rate of duty for the goods.
The obligations imposed on parties applying for a TCO under this Act include ensuring their application adheres to the provisions of section 269F and meets the core criteria detailed in section 269C. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO within a specified period. In this instance, no submissions were received. The TCO becomes effective on the date the application is lodged, as per section 269S(1).
The Act also outlines the consequences for non-compliance with the provisions of a TCO. While the explanatory statement does not explicitly detail offences or penalties, breaches of the Customs Act 1901 and related regulations can result in civil and criminal penalties. Typically, penalties for customs-related offences can include fines up to several thousand dollars and, in severe cases, imprisonment. The specifics of these penalties are governed by the broader Customs Act and associated regulations, which include provisions for fines and imprisonment under sections 234A and 234B, respectively. These penalties ensure compliance with the Act's requirements and protect the integrity of the customs duty system.