EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1045657
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.
MTU Detroit Diesel Australia Pty Ltd applied for a TCO in respect of certain vehicles transmissions on 8 October 2010.
Instrument
TCO No 1045657 was made on 10 January 2011. It declares that those certain vehicles transmissions 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. 1045657 is taken to have come into force on 8 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 Australian Parliament, introduced a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to provide tariff concessions for certain imported goods. The Customs Act 1901 aims to facilitate trade by providing concessions that can reduce the customs duty on specific goods. This legislative instrument, TCO No. 1045657, was created in response to an application from MTU Detroit Diesel Australia Pty Ltd for a concession on certain vehicle transmissions. The CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The policy objective here is to support Australian businesses by ensuring they have access to competitively priced imported goods, which can, in turn, bolster their competitiveness in the market.
Scope and Application
The Tariff Concession Instrument No. 1045657 applies to certain vehicle transmissions which have been the subject of a Tariff Concession Order (TCO) under the Customs Act 1901. The Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for determining the eligibility of goods for a TCO and subsequently making the order if the application meets the core criteria. The instrument extends its jurisdiction to entities, specifically MTU Detroit Diesel Australia Pty Ltd, that apply for such concessions on behalf of imported goods. The instrument's application is geographically and jurisdictionally confined to the Commonwealth of Australia, as it operates under the Customs Act 1901 and the Customs Tariff Act 1995. The scope of the instrument is limited to goods that are not substitutable by locally produced items, as outlined in the Act, and it excludes goods specified in section 269SJ of the Act, which are ineligible for a TCO. The instrument may also be extended or restricted through subordinate instruments, such as the Regulations under the Customs Act 1901.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1045657, under the Customs Act 1901, pertain to the establishment and implementation of Tariff Concession Orders (TCOs) (s 269F). Specifically, this instrument declares that certain vehicle transmissions are subject to a tariff concession, reducing the duty rate from 5% to free (s 269P(3)). These sections lay out the requirements for the Chief Executive Officer of Customs (CEO) to consider an application for a TCO and the conditions that must be met, such as the absence of substitutable goods produced in Australia (s 269C, s 269D, s 269E).
The obligations imposed by the Act on parties or entities governed by it include the requirement for applicants to ensure their applications for TCOs are valid and meet the core criteria (s 269C). The CEO is mandated to review the application and make a decision based on the provided criteria, ensuring no substitutable goods are produced in Australia (s 269F). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties if the application is accepted as valid (s 269K(1)). The CEO is also responsible for making the TCO effective from the date the application was lodged (s 269S(1)).
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly detail offences, penalties, or specific civil/criminal consequences for breach related to TCOs. However, the general legal framework surrounding the Customs Act could imply that any misuse or fraudulent activities related to the concession could result in penalties under other sections of the Act. The instrument itself highlights that the TCO does not disadvantage any person or impose liabilities on any person other than the Commonwealth (s 269S(1)). The rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force (Reg 126(1)(r)).