EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1035098
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.
Iveco Trucks Australia Ltd applied for a TCO in respect of certain trucks on 30 July 2010.
Instrument
TCO No 1035098 was made on 25 October 2010. It declares that those certain trucks 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. 1035098 is taken to have come into force on 30 July 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 to provide a comprehensive framework for the administration of customs duties and related matters in Australia. One significant aspect of this Act is the scheme outlined in Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This scheme was introduced to address the need for providing tariff concessions on specific goods to support Australian industries and consumers. The Tariff Concession Instrument No. 1035098 was enacted to provide a lower rate of customs duty on certain trucks, following an application by Iveco Trucks Australia Ltd on 30 July 2010. This particular instrument was made on 25 October 2010, and it specifies that the general rate of duty on these trucks is reduced to free, provided that no substitutable goods are produced in Australia. The CEO was satisfied with the application, and no submissions were received opposing the TCO. This instrument is designed to ensure that the rights of importers are beneficially affected and that no liabilities are imposed on any person as a result of its enactment.
Scope and Application
The Tariff Concession Instrument No. 1035098 under the Customs Act 1901 applies specifically to certain trucks for which Iveco Trucks Australia Ltd applied for a tariff concession order (TCO). The Act, particularly Part XVA, allows for the concession of customs duties on specified goods, provided certain criteria are met. The core criteria include the absence of substitutable goods produced in Australia in the ordinary course of business on the date the application was lodged. This instrument effectively lowers the customs duty rate for these particular trucks from the general rate of 5% to a duty-free rate. The instrument applies on a Commonwealth level, as it falls under the jurisdiction of the Customs Act 1901, and it does not affect the rights of any person other than the Commonwealth as of the date of the registration. The instrument came into effect on the date the application was lodged, 30 July 2010, and importers of these trucks can benefit by applying for a refund of duty paid on goods imported since that date. There were no submissions against the TCO application, and the instrument does not impose any liabilities on any person.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1035098 under the Customs Act 1901 (section 269F) enable the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for certain trucks. If the CEO is satisfied that the application for a TCO meets the core criteria, they must make a written order (section 269P(3)) that declares the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This effectively applies a free rate of duty on these goods, down from the general rate of 5% (section 269P(3)).
The obligations imposed on the parties governed by this Act include the requirement for applicants to ensure their applications for a TCO are valid and meet the core criteria set out in the Act. For instance, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). The CEO did not receive any submissions in response to this invitation, indicating that there were no objections to the TCO being made.
Breaches of the obligations or requirements outlined in the Act may lead to civil or criminal consequences. Under section 269K(2) of the Act, failure to comply with the requirements to make a submission or respond to a notice could potentially result in penalties as prescribed by the Act. Although the specific penalties are not detailed in this explanatory statement, generally, the Customs Act 1901 includes provisions for fines and imprisonment for breaches of its regulations. The maximum penalties for offences under the Customs Act can vary widely depending on the nature and severity of the offence, but can include substantial fines and imprisonment terms up to several years.