EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028497
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.
Zf Lemforder Australia applied for a TCO in respect of certain passenger motor vehicle wheel bearings on 25 June 2010.
Instrument
TCO No 1028497 was made on 06 October 2010. It declares that those certain passenger motor vehicle wheel bearings 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. 1028497 is taken to have come into force on 25 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, enacted by the Australian Parliament, establishes a framework for the imposition and collection of customs duties and provides for tariff concessions in certain circumstances. The introduction of the Customs Tariff Concession Order No. 1028497 in 2010 aimed to address the specific problem of ensuring that Australian industries do not face undue competitive disadvantage by providing tariff concessions on certain goods, thereby promoting fair trade and supporting local industries where applicable. The policy objective is to facilitate the importation of goods that are not produced in Australia, ensuring that Australian businesses are not unfairly disadvantaged in the marketplace. This order, in particular, was introduced following an application by Zf Lemforder Australia for tariff concessions on certain passenger motor vehicle wheel bearings, which was approved as no substitutable goods were being produced in Australia at the time.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to entities or individuals seeking a reduction in customs duty on specific goods by applying for a TCO. The scope of the Act extends to all goods not specified under section 269SJ, which lists goods that are ineligible for tariff concessions. The application process is subject to the core criteria outlined in section 269C, which mandates that the goods must not have substitutable alternatives produced in Australia at the time the application is lodged. The geographical reach of the Act is national, as it pertains to the customs duties administered by the Commonwealth of Australia. The instrument TCO No. 1028497, issued on 6 October 2010, applies to certain passenger motor vehicle wheel bearings, granting them a free rate of duty as opposed to the general 5% rate, effective from the date the application was lodged, 25 June 2010. The Act allows for the application to be extended or restricted through subordinate instruments, ensuring flexibility in its application across various industries and types of goods.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1028497 under the Customs Act 1901, particularly sections 269C, 269P(3), and 269S, establish the framework for making Tariff Concession Orders (TCOs). Section 269C outlines the core criteria for a TCO application, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269D). If these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written TCO order (section 269P(3)), declaring the applicable rate of duty for the goods, which in this case is free duty for certain passenger motor vehicle wheel bearings. This instrument specifies that these bearings are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties it governs include ensuring that any application for a TCO is submitted in accordance with section 269F and that it meets the core criteria as outlined in section 269C. The CEO is mandated to publish a notice in the Gazette under section 269K(1) to invite submissions from any interested parties if the application is deemed valid. Furthermore, section 269S(1) dictates that the TCO comes into force on the date the application is lodged, which in this instance is 25 June 2010. The Act also ensures that the rights of persons, except the Commonwealth, are not adversely affected by the TCO.
In terms of consequences for breach, the Act does not explicitly detail specific offences or penalties for non-compliance with the TCO provisions. However, any general breach of the Customs Act 1901 could result in civil or criminal penalties as outlined in other sections of the Act. For instance, wilful contraventions may lead to fines or imprisonment as stipulated by the broader legislative framework governing customs duties and regulations. The instrument ensures that the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person.