EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1050848
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.
Scania Australia Pty Ltd applied for a TCO in respect of certain bus chassis on 17 November 2010.
Instrument
TCO No 1050848 was made on 28 February 2011. It declares that those certain bus chassis 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. 1050848 is taken to have come into force on 17 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, facilitates the implementation of Tariff Concession Orders (TCOs) that lower the rate of customs duty on certain imported goods. This legislative framework addresses the gap by allowing the Chief Executive Officer of Customs to grant tariff concessions under specific conditions, such as when no substitutable goods are produced in Australia. This concession aims to support businesses by reducing the cost of importing goods that are crucial for their operations but have no local alternatives. Instrument TCO No. 1050848, for example, was made to provide a free tariff rate on certain bus chassis, benefiting Scania Australia Pty Ltd by aligning the duty rate with international standards and fostering competitive market conditions. The process requires public consultation, ensuring transparency and inclusivity in decision-making, and the TCO's commencement date aligns with the application date to protect existing rights and avoid retroactive disadvantages.
Scope and Application
The Tariff Concession Instrument No. 1050848, made under the Customs Act 1901, applies to the specific case of Scania Australia Pty Ltd's application for a Tariff Concession Order (TCO) in respect of certain bus chassis. This legislation allows for the application of a lower rate of customs duty on these goods, effectively reducing the duty from the general rate of 5% to free. The application of this instrument is limited to the particular goods specified in the TCO, and it does not extend to any other types of goods or entities unless similarly applied for and approved by the Chief Executive Officer of Customs (CEO). The geographic reach of this Act is national, as it pertains to the importation of goods into Australia and the subsequent application of customs duties as outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The legislation explicitly excludes goods listed in section 269SJ of the Customs Act 1901 from being subject to a TCO. The CEO is mandated to assess applications against the core criteria set out in the Act, specifically focusing on whether substitutable goods are produced in Australia in the ordinary course of business. The TCO is effective from the date the application was lodged, which in this case was 17 November 2010, and does not retroactively affect any duties or rights accrued prior to this date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1050848 under the Customs Act 1901 (section 269C and 269P) focus on the process by which Tariff Concession Orders (TCOs) can be made and enforced. Specifically, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. If the CEO determines that the application meets the core criteria, which includes the absence of substitutable goods produced in Australia on the day the application is lodged (section 269C), then the CEO must make a written order (section 269P(3)). This written order, the TCO, declares that the specified goods will be subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
Under this legislation, the CEO has specific obligations and requirements to follow. Upon receiving an application for a TCO, the CEO must first determine if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must then make a written TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)), inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 1050848, the CEO did not receive any submissions in response to this invitation.
Breaching the provisions of the Customs Act 1901, including failing to adhere to the requirements for making a TCO, can result in various consequences. While the explanatory statement does not specify particular offences or penalties under this specific TCO, the general provisions of the Customs Act can impose civil or criminal penalties for non-compliance. These can include fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties are outlined in the respective sections of the Act but are not detailed in this particular explanatory statement. The focus here remains on ensuring the proper application and enforcement of TCOs to benefit eligible importers by providing them with tariff concessions on specified goods.