EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1044573
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.
Skf Australia applied for a TCO in respect of certain passenger motor vehicle wheel ball bearings on 30 September 2010.
Instrument
TCO No 1044573 was made on 23 December 2010. It declares that those certain passenger motor vehicle wheel ball 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. 1044573 is taken to have come into force on 30 September 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 Tariff Concession Instrument No. 1044573, enacted in 2010, pertains to the Customs Act 1901, which provides a framework for granting tariff concessions on certain goods. This particular instrument addresses the need for tariff concessions on specific passenger motor vehicle wheel ball bearings, which were subject to a lower rate of customs duty under the scheme outlined in the Customs Act. The instrument was introduced to facilitate the importation of these goods by reducing their duty from the general rate of 5% to free. The policy objective here is to support the importation of goods where no substitutable alternatives are produced in Australia, thereby encouraging trade and potentially reducing costs for importers.
The instrument was enacted by the Chief Executive Officer of Customs, in accordance with the authority granted under section 269F of the Customs Act. The instrument was made following an application by Skf Australia and was published in the Gazette with an invitation for submissions, though none were received. This process ensures transparency and allows for any objections to be considered before a concession is granted. The tariff concession is effective from the date the application was lodged, 30 September 2010, and does not affect any pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the process by which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Act applies to individuals and entities who apply for a TCO in respect of goods that are not specified in section 269SJ, which excludes certain goods from tariff concessions. The Act's jurisdictional reach is national, as it pertains to the Commonwealth of Australia, and it impacts the customs duty rates on specific imported goods. The application of a TCO hinges on the core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act allows for the application to be extended or restricted through subordinate instruments, which may include regulations and notifications. The Explanatory Statement for Tariff Concession Instrument No. 1044573 clarifies that this particular TCO applies to certain passenger motor vehicle wheel ball bearings, effectively granting them a duty-free status under specific conditions outlined by the Act.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C outlines the core criteria that an application must meet, which is determined by whether no substitutable goods were produced in Australia at the time the application was lodged (section 269P(3)). If these criteria are met, the CEO must make a written order that specifies the goods subject to the TCO and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to them (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). The TCO comes into force on the day the application is lodged (subsection 269S(1)).
The Act imposes certain obligations on both the applicant and the CEO. For the applicant, the primary obligation is to ensure their TCO application meets the core criteria specified in section 269C. This includes demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO's obligations include accepting the application as valid, publishing a notice in the Gazette inviting submissions, and deciding whether to make a TCO if the application meets the core criteria. The CEO must also ensure that any TCO made does not disadvantage any person other than the Commonwealth or impose liabilities on anyone for actions taken before the TCO's registration date.
Failure to comply with the provisions of the Customs Act 1901 can result in various penalties and consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can lead to civil or criminal penalties. Civil penalties might include fines, while criminal penalties can include imprisonment, depending on the severity and nature of the breach. The maximum penalties would be determined by the specific breach and relevant sections of the Customs Act 1901 or any other applicable legislation.