EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119753
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.
Croc Tyres Pty Ltd applied for a TCO in respect of certain tyres on 20 June 2011.
Instrument
TCO No 1119753 was made on 12 September 2011. It declares that those certain tyres 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. 1119753 is taken to have come into force on 20 June 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. 1119753 was enacted in 2011 under the Customs Act 1901. The primary objective of this legislation is to provide tariff concessions for specific goods, enabling a lower rate of customs duty to be applied. This was introduced to address a gap in the existing framework by facilitating tariff concessions for goods where no substitutable goods are produced in Australia in the ordinary course of business. The enacting body responsible for this legislation is the Chief Executive Officer of Customs, who must ensure that the application for a Tariff Concession Order (TCO) meets the core criteria specified in section 269C of the Customs Act. The policy objective is to support industries by reducing import costs and potentially enhancing competitiveness for the affected goods. This measure benefits importers by allowing them to apply for refunds of duty on the goods since the date the TCO is deemed to have come into force.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for lower rates of customs duty on goods, contingent upon certain criteria being met. A TCO can be applied for by any person concerning goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The Act mandates that a TCO application is eligible if, on the application date, there are no substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, specifying the reduced duty rate applicable to the goods in question. This mechanism aims to support industries by reducing the cost of imported goods, thereby potentially increasing competitiveness and consumer affordability.
Geographically, the application of the TCO is national in scope, applying across Australia, given the federal nature of the Customs Act 1901. The Act does not specify exclusions or exemptions beyond those outlined in section 269SJ, nor does it set explicit thresholds for eligibility. The TCO itself does not impose any liabilities on persons other than the Commonwealth and does not affect any pre-existing rights or obligations of such persons. The commencement date of a TCO is the date on which the application is lodged, ensuring immediate effect for qualifying goods, as seen in TCO No. 1119753 issued for certain tyres on 20 June 2011, which reduced the duty rate from 5% to free.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for Tariff Concession Orders (TCOs) under section 269F, allowing for lower rates of customs duty on certain goods. Specifically, section 269C mandates that a TCO application meets core criteria if no substitutable goods were produced in Australia at the time of the application, with definitions provided in sections 269D, 269E, and 269F. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must make a TCO, as per section 269P(3), which was the case with TCO No 1119753 for certain tyres on 12 September 2011. This order declared that the specified tyres are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5%.
The Act imposes certain obligations on parties involved in the TCO process. An applicant, such as Croc Tyres Pty Ltd, must ensure their application meets the core criteria, as outlined in section 269C. The CEO, on the other hand, is required to publish a notice in the Gazette, inviting submissions from any person who might object to the TCO, as stipulated in section 269K(1). This ensures transparency and allows interested parties to voice their concerns before the CEO makes a decision. In this case, no objections were received.
Failure to comply with the Act's provisions can result in various consequences. Although the explanatory statement does not specify particular offences, penalties, or consequences for breach, it is clear that any non-compliance with the TCO process or the conditions set out in the Act could lead to legal repercussions. These might include fines, penalties, or other civil or criminal actions, depending on the severity and nature of the breach. The exact penalties would be determined based on the specific provisions of the Act and any relevant regulations.