EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105087
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 diesel engine crankshaft bearing housing shells on 04 February 2011.
Instrument
TCO No 1105087 was made on 29 April 2011. It declares that those certain diesel engine crankshaft bearing housing shells 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. 1105087 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 Tariff Concession Instrument No. 1105087, enacted under the Customs Act 1901, was introduced to address the need for specific tariff concessions for certain goods, in this case, diesel engine crankshaft bearing housing shells. This legislative instrument, issued by the Chief Executive Officer of Customs, aims to provide a lower rate of customs duty on these goods, facilitating their importation and potentially benefiting the market. The instrument was developed in response to an application by MTU Diesel and aims to ensure that the application of the concession does not disadvantage any party or impose new liabilities, while allowing for duty refunds to importers of the specified goods. The process of enacting this tariff concession underscores the intent to streamline import processes and support the economic interests tied to the importation of these particular goods.
Scope and Application
The Tariff Concession Instrument No. 1105087 under the Customs Act 1901 applies to certain diesel engine crankshaft bearing housing shells, which are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This legislation is specifically tailored for entities or individuals involved in the importation of these goods, as it significantly reduces or eliminates customs duty on them. The geographic reach of this Act is national, impacting importers across Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which excludes certain types of goods from tariff concessions. The application of the TCO is further detailed and potentially expanded through subordinate instruments such as the Customs Tariff Act 1995, which provides the framework for the rates and classifications of duties. The TCO was implemented on the date the application was lodged, ensuring that any importation of the specified goods from that date onwards is subject to the concessional duty rate.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1105087 under the Customs Act 1901 include section 269F, which allows for applications for tariff concession orders (TCOs) for goods, and section 269C, which stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (sections 269C and 269F). Section 269P(3) requires that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application meets the core criteria, they must make a written order (a TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)). The instrument declares that certain diesel engine crankshaft bearing housing shells are subject to a zero rate of duty under item 50 of Schedule 4 to the Tariff, as the CEO was satisfied that no substitutable goods were produced in Australia (section 269P(3)).
The Customs Act 1901 imposes several obligations and requirements on the parties involved in the process of applying for and implementing a TCO. The CEO must ensure that any application for a TCO is assessed against the core criteria outlined in section 269C of the Act. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO determines that the application meets the core criteria, they must proceed to issue a written TCO as specified in section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of the TCO, as mandated by section 269K(1). In this instance, no submissions were received in response to the notice published.
The Act also outlines specific consequences for breaches related to the implementation of TCOs. While the explanatory statement does not detail specific offences or penalties under the Customs Act 1901, it is reasonable to infer that any failure to comply with the requirements for applying for or implementing a TCO could potentially lead to legal action. For example, misrepresentation in an application or non-compliance with the terms of a TCO could result in civil or criminal penalties, including fines or other sanctions as prescribed by relevant legislation. Although the maximum penalties are not explicitly stated in the explanatory statement, they would typically be found in the relevant sections of the Customs Act 1901 or related regulations.