EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1104965
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 Diesel applied for a TCO in respect of certain exhaust gas recirculation valves on 04 February 2011.
Instrument
TCO No 1104965 was made on 29 April 2011. It declares that those certain exhaust gas recirculation valves 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. 1104965 is taken to have come into force on 04 February 2011.
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, provides the framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) that offer reduced customs duty rates on specific goods. This legislation was introduced to address the need for flexibility in the imposition of customs duties, particularly to support industries that lack domestic production capabilities for certain goods. The Tariff Concession Instrument No. 1104965, made under the Customs Act, grants a tariff concession to MTU Diesel for certain exhaust gas recirculation valves, reducing the customs duty from 5% to free, effective from the date of the application, 04 February 2011. This measure aims to support the industry by lowering the cost of importing these specific goods, without imposing any new liabilities on importers or affecting existing rights.
Scope and Application
The Tariff Concession Instrument No. 1104965 under the Customs Act 1901 applies specifically to exhaust gas recirculation valves, as identified in the instrument. The Act pertains to the application process for tariff concession orders which are granted by the Chief Executive Officer of Customs. This instrument affects entities such as MTU Diesel that have applied for tariff concessions on certain goods. The geographic and jurisdictional reach of this Act is national, as it is an instrument under the Commonwealth’s Customs Act. The Act applies to any person or entity that meets the criteria for a tariff concession order, particularly where substitutable goods are not produced in Australia. The instrument exempts certain goods from tariff concessions as specified in section 269SJ of the Act. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which sets out the rates of duty on various goods. The commencement of the TCO is effective from the date the application was lodged, and it does not affect the rights of any person, except to the benefit of importers who can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) under section 269F (1). An application for a TCO can be submitted by any person seeking a lower rate of customs duty for specified goods. The CEO must assess whether the application meets the core criteria outlined in section 269C. These criteria are satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in section 269D and section 269E. If the CEO determines that the application meets these criteria, a written TCO is issued under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
The obligations under this Act require the CEO to review TCO applications and decide whether they meet the core criteria. The CEO must also publish a notice in the Gazette, inviting any person who might have an interest in opposing the TCO to submit their views. This process is outlined in section 269K(1) of the Act. In the case of TCO No. 1104965, no submissions were received in response to the published notice, and the CEO proceeded to issue the TCO based on the information provided by MTU Diesel. The TCO declares that certain exhaust gas recirculation valves are subject to a lower rate of duty under the specified item of the Customs Tariff.
The Act imposes several obligations on the parties involved. The CEO must ensure that applications for TCOs are valid and meet the criteria set out in the Act. The CEO is also responsible for publishing notices in the Gazette and considering any submissions received. On the other hand, applicants must provide sufficient information to demonstrate that their goods meet the core criteria for a TCO. The TCO itself provides a benefit to importers by reducing the customs duty on the specified goods, as outlined in section 269S(1) of the Act.
Breach of the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally can result in fines, imprisonment, or both, depending on the severity of the offence. The maximum penalties are stipulated in other sections of the Customs Act and may include significant financial penalties for both individuals and corporations. Compliance with the Act is therefore crucial for all parties involved in the importation of goods subject to a TCO.