EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014113
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.
Futuris Automative Interiors applied for a TCO in respect of certain vehicle headliner substrate sheets on 22 March 2010.
Instrument
TCO No 1014113 was made on 11 June 2010. It declares that those certain vehicle headliner substrate sheets 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. 1014113 is taken to have come into force on 22 March 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. 1014113 was enacted in 2010 under the Customs Act 1901, addressing the need to provide tariff concessions for specific goods that do not have Australian substitutes, thereby promoting fair competition and encouraging the importation of certain products. This instrument was introduced by the Chief Executive Officer of Customs, following an application by Futuris Automotive Interiors for a Tariff Concession Order (TCO) concerning vehicle headliner substrate sheets. The primary objective of this legislation is to facilitate the importation of these goods by applying a zero rate of customs duty, which contrasts with the general rate of 5% for similar items. The Tariff Concession Order was published in the Gazette, inviting submissions from interested parties; however, none were received. Consequently, the TCO was enacted on the date the application was lodged, 22 March 2010, ensuring that importers of these goods can apply for duty refunds from that date. This legislation does not disadvantage any person or impose liabilities for actions taken before its registration.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. This Act applies to any person or entity seeking to import goods that are not specified in section 269SJ of the Act as ineligible for tariff concessions. The legislation is applicable nationally across Australia, given the scope of the Customs Act, which operates at the Commonwealth level. A TCO application is considered valid if, on the date of application, no substitutable goods are being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once a TCO is made, it comes into force on the date the application was lodged, with no retrospective effect on rights or liabilities except for the Commonwealth. Futuris Automotive Interiors' application for a TCO on certain vehicle headliner substrate sheets, which was accepted and published in the Gazette, resulted in Tariff Concession Order No. 1014113, granting these goods a duty-free status from 22 March 2010.
Key Provisions
The primary provisions of Tariff Concession Instrument No. 1014113, under the Customs Act 1901, involve the application and implementation of Tariff Concession Orders (TCOs) for specific goods. Section 269F (1) of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act as ineligible for TCOs. If the CEO determines that the application meets the core criteria, primarily that no substitutable goods were produced in Australia on the application date (as per sections 269C and 269P(3)), a TCO is issued. This particular instrument, TCO No. 1014113, made on 11 June 2010, pertains to certain vehicle headliner substrate sheets, which are now subject to a zero rate of duty as opposed to the general 5% rate.
The obligations imposed by this Act on the parties it governs are centred around the application and approval process for TCOs. The CEO must ensure that the application is valid and meets the criteria specified in section 269C of the Act, including publishing a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). In this case, the CEO did not receive any submissions against the application for TCO No. 1014113, facilitating the issuance of the order. Importers of the affected goods can benefit from this concession by applying for a refund of duty on goods imported since the TCO came into force on 22 March 2010 (paragraph 126(1)(r) of the Regulations).
Offences and penalties under the Customs Act 1901 for breaches of the tariff concession scheme are not explicitly detailed in the explanatory statement, but generally, non-compliance with customs regulations can lead to severe consequences. Under the Customs Act, breaches may result in civil or criminal penalties, including fines and imprisonment. The maximum penalties can vary depending on the nature and severity of the breach but may include substantial fines for individuals and corporations, as well as imprisonment for serious or repeated offences. The specifics of these penalties would be governed by the broader provisions of the Customs Act and related legislation.