EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1044726
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 single and/or dual cab chassis trucks on 01 October 2010.
Instrument
TCO No 1044726 was made on 07 January 2011. It declares that those certain single and/or dual cab chassis 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. 1044726 is taken to have come into force on 01 October 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 Parliament of Australia, provides a framework for the imposition of customs duties and the regulation of imports and exports. One notable feature of this Act is the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs, as detailed in Part XVA of the Act. This scheme was introduced to address the problem of ensuring that imported goods are subject to fair and reasonable customs duties, particularly in cases where no substitutable goods are produced in Australia. The policy objective is to facilitate trade by potentially reducing the customs duty on imported goods, thus benefiting importers and potentially lowering the cost of goods for consumers. Tariff Concession Order No. 1044726, for example, was made in response to an application from Iveco Trucks Australia Ltd concerning certain single and/or dual cab chassis trucks, reflecting this objective by granting a concession that reduced the duty on these goods from the general rate of 5% to free.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specified goods, subject to certain criteria. Any person can apply for a TCO, provided the goods in question are not those explicitly excluded under section 269SJ of the Act. The CEO must determine if the application meets the core criteria, which include the absence of substitutable goods being produced in Australia in the ordinary course of business. If satisfied, the CEO issues a TCO, which applies a prescribed lower duty rate on the specified goods. This legislative framework applies nationally, and the scope of its application can be extended or restricted through subordinate instruments. Notably, TCOs do not retroactively disadvantage or impose liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1044726 under the Customs Act 1901 provide the framework for granting tariff concessions on certain goods, specifically single and/or dual cab chassis trucks. Section 269F (1) allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria as stipulated in sections 269C and 269P(3), a TCO will be made. Section 269C defines the core criteria, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order (a TCO) declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995, with the associated duty rates.
The Act imposes several obligations on both the applicant and the CEO. The applicant must ensure their application is valid and meets the core criteria, specifically that no substitutable goods were produced in Australia on the day of the application. The CEO has the responsibility to evaluate the application, consult with relevant parties by publishing a notice in the Gazette as per section 269K(1), and decide whether to grant the TCO if the core criteria are satisfied. Once a TCO is made, it becomes effective on the date the application was lodged, as stated in section 269S(1). The CEO is also tasked with ensuring that the rights of persons other than the Commonwealth are not adversely affected by the TCO.
Failure to comply with the requirements set out in the Customs Act 1901 may result in various consequences. For instance, if an applicant submits an application that does not meet the core criteria, the CEO is not obligated to grant the TCO. Additionally, any misleading or incorrect information provided in the application process could lead to further scrutiny or refusal of the TCO. While the explanatory statement does not detail specific penalties for breaches, the Act generally provides for enforcement actions which may include fines or other legal repercussions for non-compliance with customs regulations.
Overall, Tariff Concession Instrument No. 1044726 facilitates the application and approval process for tariff concessions on specific goods, ensuring that the requirements and obligations of both applicants and the CEO are clearly defined and adhered to.