EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134244
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.
Complete Steering Australia Pty Ltd applied for a TCO in respect of certain truck parts on 11 October 2011.
Instrument
TCO No 1134244 was made on 09 January 2012. It declares that those certain truck parts 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. 1134244 is taken to have come into force on 11 October 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, establishes a framework within which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislative instrument addresses the need to provide tariff concessions on specific goods, ensuring they attract a lower rate of customs duty than would otherwise apply. The Tariff Concession Instrument No. 1134244, made under this Act, was introduced following an application by Complete Steering Australia Pty Ltd for a TCO concerning certain truck parts. The policy objective, as outlined in the explanatory statement, was to provide a tariff concession where no substitutable goods were produced in Australia, thus facilitating the importation of these specific goods at a reduced duty rate. This instrument came into force on the date the application was lodged, 11 October 2011, and does not disadvantage any person other than the Commonwealth or impose liabilities on any person in relation to actions taken before its registration.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the legislative framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These TCOs apply to goods specified in the order and reduce the rate of customs duty applicable to them, provided the goods are not listed in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The Act applies to any person who applies for a TCO in respect of goods, provided the application meets the core criteria outlined in section 269C. This criterion is satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The geographic and jurisdictional reach of the Act is national, as it pertains to the Commonwealth of Australia, and the application of the Act is not restricted by state or territory boundaries. The commencement of a TCO is effective from the date the application is lodged, and it does not affect the rights of any person to disadvantage them or impose liabilities for actions taken prior to the date of registration. The Act allows for the extension or restriction of its application through subordinate instruments, which can provide further detail on the specifics of TCOs and their implementation.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they relate to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, 269SJ, and 269K. Section 269F allows an application for a TCO to be made to the Chief Executive Officer of Customs (CEO), provided the goods are not specified in section 269SJ. If the CEO determines that the application meets the core criteria, such as no substitutable goods being produced in Australia (section 269C), they must issue a written order under section 269P. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from the public, although in this case, no submissions were received. The TCO is deemed to have come into effect on the date the application was lodged (section 269S), providing benefits to importers who can apply for duty refunds (Regulation 126(1)(r)).
The Act imposes several obligations on the CEO regarding TCO applications. Firstly, the CEO must ensure that the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO. Secondly, the CEO must verify that no substitutable goods are being produced in Australia on the day the application is lodged, as per section 269C. Upon meeting these criteria, the CEO must issue a written order declaring the goods eligible for the tariff concession. Additionally, the CEO must publish a notice in the Gazette, inviting submissions from the public regarding the application, as stipulated in section 269K. Although no submissions were received in this case, the CEO must still comply with this requirement.
There are no specific offences, penalties, or consequences outlined in the text for failing to comply with the requirements of the Act. However, any breach of the conditions or obligations under the Act could potentially lead to legal action or administrative penalties as per other sections of the Customs Act 1901 or relevant regulations. For example, failure to comply with the duty refund provisions under Regulation 126(1)(r) could result in financial penalties or legal consequences for the affected parties. The text does not specify maximum penalties but implies that adherence to the Act is crucial for avoiding adverse legal outcomes.