EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046763
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.
Isuzu Australia Ltd applied for a TCO in respect of certain compression ignition engine trucks on 18 October 2010.
Instrument
TCO No 1046763 was made on 12 January 2011. It declares that those certain compression ignition engine 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. 1046763 is taken to have come into force on 18 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, establishes a framework for Tariff Concession Orders (TCOs) that reduce the customs duty on specific goods. The Act enables the Chief Executive Officer of Customs to grant concessions if certain conditions are met, notably the absence of substitutable goods produced in Australia. The primary objective is to facilitate the importation of goods that are not locally manufactured, thereby supporting trade and economic activities. Tariff Concession Instrument No. 1046763, made under this Act, was introduced in response to an application by Isuzu Australia Ltd for a TCO on certain compression ignition engine trucks. The instrument, effective from 18 October 2010, provides a zero-duty rate on these trucks, which contrasts with the standard 5% duty, and was published in the Gazette with no objections received. The TCO aims to enhance the competitive position of these imported trucks without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for particular goods, thereby reducing the customs duty rate applicable to these goods. A TCO can be sought by any person, provided the goods in question are not specified as ineligible under section 269SJ of the Act. The TCO process requires that on the date the application was submitted, there are no goods that could be considered substitutes for the goods in question produced in Australia in the ordinary course of business. This concession applies nationally, with the CEO's decision being the final authority. The TCO does not extend to imposing liabilities on individuals or entities for actions taken before the TCO's effective date, although it may entitle importers to refunds for duties paid on the goods since the TCO's effective date. The instrument in question, TCO No. 1046763, relates to certain compression ignition engine trucks, reducing their duty rate from 5% to free, effective from the date the application was lodged, 18 October 2010.
Key Provisions
The main operative sections of the Customs Act 1901, specifically as they pertain to Tariff Concession Orders (TCOs), are found in sections 269C, 269F, 269P, and 269SJ (paragraphs 1 to 5). Section 269F outlines the process for applying for a TCO, while section 269C specifies the core criteria that the application must meet. Section 269P(3) mandates the CEO to issue a written order if the application meets the criteria. Section 269SJ lists goods that cannot be subject to a TCO. In this particular case, TCO No. 1046763 pertains to certain compression ignition engine trucks, which are now subject to a reduced customs duty rate, from 5% to free, as specified in item 50 of Schedule 4 to the Tariff.
The Act imposes several obligations on parties involved with TCOs. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit reasons why a TCO should not be made. This ensures transparency and allows for potential objections to be considered before a decision is made. In the case of TCO No. 1046763, no objections were received, indicating a smooth process without any significant concerns from stakeholders. Additionally, section 269S(1) stipulates that a TCO comes into force on the day the application is lodged, which was 18 October 2010 for this particular TCO.
The Act does not explicitly outline specific offences, penalties, or consequences for breaches related to the issuance or compliance with TCOs. However, it is implied that any misuse or non-compliance with the provisions of the Act and the Tariff could lead to broader legal consequences under the Customs Act. The Tariff Concession Instrument No. 1046763 itself does not introduce new penalties but operates within the existing legal framework that governs customs duties and concessions. The absence of objections during the consultation phase suggests that the TCO was issued in compliance with the procedural requirements set out in the Act.