EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114759
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.
Yamaha Motor Australia Pty Ltd applied for a TCO in respect of certain golf cars on 11 May 2011.
Instrument
TCO No 1114759 was made on 01 August 2011. It declares that those certain golf cars 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. 1114759 is taken to have come into force on 11 May 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 Commonwealth Parliament, provides a framework for the regulation of customs duties and provides for the possibility of tariff concessions in certain circumstances. The Act was designed to facilitate trade and economic growth by allowing for tariff reductions on specific goods where warranted, thereby promoting competitive pricing and economic efficiency. The explanatory statement outlines Tariff Concession Order No. 1114759, which was introduced to provide a tariff concession on certain golf cars, thereby reducing the customs duty from 5% to free. This concession was made by the Chief Executive Officer of Customs, following an application by Yamaha Motor Australia Pty Ltd, after it was determined that no substitutable goods were produced in Australia. The process involved publishing a notice in the Gazette to invite objections, which did not receive any, and the order is taken to have come into force on the date the application was lodged, 11 May 2011. The policy objective of this concession appears to be to support economic activities related to the importation of these specific goods by reducing the financial burden on importers.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to specified goods. These orders can be made by the Chief Executive Officer of Customs (CEO) upon application by a person, provided the goods do not fall under the exclusions listed in section 269SJ and meet the core criteria outlined in sections 269C, 269B, and 269D of the Act. A TCO application is deemed to meet these criteria if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. TCO No. 1114759 applies to certain golf cars, providing them with a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from the date the application was lodged, 11 May 2011. The CEO must consult by publishing a notice in the Gazette inviting submissions against the TCO, though no submissions were received for this particular order. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities, while allowing importers to apply for a refund of duty on goods imported since the effective date of the order.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1114759 (F2011L02311) relate to the making of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). The instrument declares certain golf cars to be subject to a TCO, which means they will be subject to a free rate of duty rather than the general rate of 5% (section 269P(3)). Section 269C outlines the core criteria that must be satisfied for an application to be accepted, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The TCO, once made, is deemed to have come into force on the date the application was lodged, as per section 269S(1), in this case, 11 May 2011.
The Act imposes several obligations on the parties involved, primarily the Chief Executive Officer of Customs (CEO). The CEO must consider any submissions received in response to the notice published in the Gazette (subsection 269K(1)). In this instance, no submissions were received, allowing the CEO to proceed with the TCO. Additionally, the CEO must ensure that the application meets the core criteria as defined in sections 269C, 269D, and 269E. The CEO is also required to make a written order if satisfied that the application meets these criteria, as per section 269P(3). Importers, on the other hand, have the right to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements set out in the Customs Act 1901 and its associated regulations could result in civil or criminal penalties. Although the explanatory statement does not specify the exact penalties, breaches of the Customs Act can generally lead to fines or imprisonment, depending on the severity of the offence. The maximum penalties would be determined by the specific sections of the Act or associated legislation that are breached. For example, section 260 of the Customs Act provides for penalties including fines up to 10,000 penalty units or imprisonment for up to 10 years, or both, for serious breaches. It is essential that all parties adhere to the requirements to avoid any legal repercussions.