EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042002
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.
Ford Motor Co Australia Ltd applied for a TCO in respect of certain spark ignition internal combustion engine pistons on 01 November 2010.
Instrument
TCO No 1042002 was made on 06 December 2010. It declares that those certain spark ignition internal combustion engine pistons 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. 1042002 is taken to have come into force on 01 November 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 under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide lower rates of customs duty for specified goods, applicable from the date of application, provided no substitutable goods are produced in Australia in the ordinary course of business. The Tariff Concession Instrument No. 1042002, made under the Act on 06 December 2010, applies to certain spark ignition internal combustion engine pistons, reducing their duty rate to free from the general rate of 5%. This instrument was enacted following an application by Ford Motor Co Australia Ltd on 01 November 2010, and it became effective on the same date. The instrument aims to provide tariff relief to importers of these specific goods, allowing them to seek refunds of duty paid since the effective date of the concession. The CEO published a notice in the Gazette inviting submissions against the TCO application, but no objections were received.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on certain goods. This Act applies to any person or entity that seeks to import goods eligible for a TCO, provided these goods are not specified in section 269SJ as ineligible. The Act's application is Commonwealth-wide, with its provisions extending across all states and territories of Australia. The TCO mechanism is designed to benefit importers by reducing the duty on specific goods, provided that no substitutable goods are produced in Australia in the ordinary course of business as defined by the Act. For instance, Tariff Concession Instrument No. 1042002, which was issued following an application by Ford Motor Co Australia Ltd, pertains to spark ignition internal combustion engine pistons. This instrument became effective from 1 November 2010, the date of the application, and allows for these specific pistons to be imported duty-free, contrasting with the general rate of duty of 5% applicable to similar goods. Any liabilities or rights of individuals or entities are protected from adverse effects by the TCO as long as they pertain to actions taken before the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1042002 under the Customs Act 1901 (section 269F) allow for the application for Tariff Concession Orders (TCOs) by an applicant, which in this case was Ford Motor Co Australia Ltd for certain spark ignition internal combustion engine pistons. Section 269C of the Act 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 Act also requires that the Chief Executive Officer of Customs (CEO) must make a written order declaring the goods the subject of the TCO application (section 269P(3)).
The obligations and requirements imposed by the Act on parties, such as Ford Motor Co Australia Ltd, include lodging a valid application for a TCO (section 269F) and ensuring that the application meets the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). Ford Motor Co Australia Ltd, as the applicant, must provide all necessary information to substantiate that no substitutable goods were produced in Australia. The CEO has the obligation to evaluate the application against the criteria and, if satisfied, to make the TCO.
For breach of the provisions under the Customs Act 1901, section 269SJ specifies goods that cannot be subject to a TCO, and any application in respect of these goods would not be considered. The Act does not specify particular offences, penalties, or consequences for breach of its provisions; however, the implications of not meeting the core criteria could result in the application being rejected. If an applicant knowingly submits false information to secure a TCO, it could potentially lead to legal consequences under general criminal and civil law provisions pertaining to fraud and misrepresentation. The Act ensures that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration, and it does not impose any liabilities on any person (section 269S(1)).