EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1026335
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.
Trico Products Pty Ltd applied for a TCO in respect of certain windscreen wiper parts on 11 June 2010.
Instrument
TCO No 1026335 was made on 06 September 2010. It declares that those certain windscreen wiper 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. 1026335 is taken to have come into force on 11 June 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 Australian Parliament to facilitate trade by regulating the import and export of goods. The Act provides a framework for the imposition and remission of customs duty on goods, and includes mechanisms for tariff concession orders (TCOs) to provide relief from customs duty under certain conditions. Tariff Concession Instrument No. 1026335 was introduced to address the gap in the tariff structure for specific goods by providing a lower rate of customs duty for certain windscreen wiper parts, as no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. The instrument was made by the Chief Executive Officer of Customs following an application by Trico Products Pty Ltd on 11 June 2010, and it came into force on the same day. This legislative instrument ensures that the rights of importers are beneficially affected, and no new liabilities are imposed on any person as a result of the concession.
Scope and Application
The Tariff Concession Instrument No. 1026335, made under the Customs Act 1901, applies to specific windscreen wiper parts, effectively reducing the customs duty on these goods to zero. This instrument is targeted at entities and individuals involved in the importation of these particular goods. The instrument is applicable nationally across Australia, as it is a federal instrument operating under Commonwealth law. The scope of the instrument is limited to the goods specified in the application by Trico Products Pty Ltd and does not extend to any other goods unless explicitly stated. The instrument excludes any goods that are listed in section 269SJ of the Customs Act 1901, which identifies goods that cannot be subject to a Tariff Concession Order. Additionally, the application of this instrument can be further refined or extended through subordinate instruments, though in this specific case, no such extensions or restrictions have been noted. The commencement date of this instrument is 11 June 2010, and it does not adversely affect any rights or impose any liabilities on persons other than the Commonwealth in relation to actions taken prior to the instrument’s effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1026335 under the Customs Act 1901 (the Act) allow for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) (sections 269C, 269F, and 269P(3)). A TCO applies a lower rate of customs duty to specified goods. An application for a TCO must be made by a person to the CEO (section 269F), and if it is not in respect of goods specified in section 269SJ of the Act, the CEO must determine whether it meets the core criteria (section 269C). The core criteria require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Definitions of key terms such as "substitutable goods," "goods produced in Australia," and "ordinary course of business" are provided in sections 269D, 269E, and 269F of the Act.
The Act imposes obligations on the CEO to ensure that any TCO application that is not in respect of goods specified in section 269SJ of the Act is assessed against the core criteria. If the CEO is satisfied that the application meets these criteria, a written order must be made declaring that the goods the subject of the TCO application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). The CEO must also publish a notice in the Gazette, inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). The TCO will come into force on the day the application for the TCO was lodged (subsection 269S(1)).
The Act does not specify any offences for breaches of the TCO provisions. However, there are potential civil and administrative consequences for non-compliance with the requirements of the TCO. For example, if a person imports goods that should benefit from a TCO but fails to apply for a refund of duty, they may lose the opportunity for the refund as provided under paragraph 126(1)(r) of the Regulations. There are no penalties specified in the Act for breach of the TCO provisions, but general penalties for breaches of the Customs Act 1901 may apply, including fines and imprisonment for serious offences. The specific penalties would depend on the nature and severity of the breach.