EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023698
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.
Mercedes Benz Australia Pacific Pty Ltd applied for a TCO in respect of certain buses on 27 May 2010.
Instrument
TCO No 1023698 was made on 29 September 2010. It declares that those certain buses 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. 1023698 is taken to have come into force on 27 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, enacted by the Parliament of Australia, governs the administration of customs and excise duties in Australia. Part XVA of the Act establishes a scheme allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on certain goods. The Tariff Concession Instrument No. 1023698 was introduced to address the specific need for tariff concessions on certain buses imported by Mercedes Benz Australia Pacific Pty Ltd. This instrument was enacted to ensure that the application for tariff concessions was processed in accordance with the requirements set out in the Customs Act 1901, including the publication of a notice in the Gazette and the consideration of any submissions received. The policy objective is to facilitate the import of goods by providing tariff concessions where appropriate, thereby supporting trade and economic activities without imposing liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1023698 under the Customs Act 1901 applies to the concession of customs duty rates for certain buses imported by Mercedes Benz Australia Pacific Pty Ltd. This instrument operates within the Commonwealth jurisdiction of Australia, as it pertains to the Customs Act, which is a federal statute. The application of this instrument is limited to the specific goods for which a Tariff Concession Order (TCO) has been made, in this case, certain buses, and it does not apply to any other goods or entities unless similarly specified in a separate TCO. The scope of the Act encompasses any person or entity seeking to import goods that qualify under the conditions set out in section 269C, provided that these goods are not listed in section 269SJ, which details goods ineligible for tariff concessions. The application of the Act is further extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the tariff items applicable to the goods in question. This particular TCO took effect from the date the application was lodged, 27 May 2010, and does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth for actions taken before this date.
Key Provisions
The Tariff Concession Instrument No. 1023698, under the Customs Act 1901, is a crucial legislative measure that establishes a tariff concession order for certain goods. According to section 269F, a person can apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specified goods. If the application complies with the statutory requirements and does not pertain to goods excluded by section 269SJ, the CEO must assess whether it meets the core criteria (section 269C). This involves ensuring that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (section 269D, 269E). If these conditions are satisfied, the CEO must issue a TCO, as outlined in section 269P(3), effectively reducing the customs duty on the specified goods.
The obligations imposed by the Act on the parties involved, particularly the CEO, are significant. The CEO must carefully evaluate each TCO application to ensure compliance with the core criteria. This includes confirming that no substitutable goods were produced in Australia on the date of the application. If the CEO determines that the application meets these criteria, they must promptly issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on the application, as stipulated in section 269K(1). This ensures transparency and provides an opportunity for public input. In the case of TCO No. 1023698, Mercedes Benz Australia Pacific Pty Ltd applied for a concession on certain buses, and no submissions were received in response to the published notice.
Failure to comply with the provisions of the Customs Act 1901 can lead to serious consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the Act can result in both civil and criminal liabilities. Under Australian law, non-compliance with customs regulations can lead to fines, penalties, and potential imprisonment for individuals. For corporations, penalties can include substantial fines and other civil sanctions. The exact penalties depend on the nature and severity of the breach, as well as any relevant case law and statutory provisions.
In summary, Tariff Concession Instrument No. 1023698 provides a framework for reducing customs duty on specified goods, subject to certain conditions. The CEO has a pivotal role in assessing applications and ensuring compliance with the core criteria. The obligations on the CEO include thorough evaluation of applications, publication of notices in the Gazette, and timely issuance of TCOs. Non-compliance with the Act's provisions can result in significant civil and criminal consequences, highlighting the importance of adherence to the legislative requirements.