EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501085
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.
Thiess Alstom Joint Venture applied for a TCO in respect of certain train track parts on 20 January 2005.
Instrument
TCO No 0501085 was made on 18 April 2005. It declares that those certain train track 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 3%.
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 No0501085 is taken to have come into force on 20 January 2005.
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 was enacted to establish a framework for the administration of customs duties and other import and export controls in Australia. The Act, which is overseen by the Australian Parliament, allows for the creation of Tariff Concession Orders (TCOs) to provide preferential duty rates on specific goods under certain conditions. One such TCO, Instrument No. 0501085, was introduced on 18 April 2005 to address the issue of applying a concessional tariff rate to certain train track parts, which were identified as not having substitutable goods produced in Australia. The policy objective of this legislation is to facilitate the importation of these goods at a reduced duty rate, thereby encouraging their availability in the Australian market and potentially benefiting industries that rely on these specific components. The process ensures that no person other than the Commonwealth is disadvantaged or subjected to new liabilities by the concession, while importers may apply for duty refunds on qualifying goods imported since the effective date of the order.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that provide lower rates of customs duty for specified goods. A TCO can be applied for by any person, but the Act excludes certain goods from being subject to such orders, as outlined in section 269SJ. If an application is deemed to meet the core criteria, including the absence of substitutable goods produced in Australia, the CEO is mandated to issue a TCO. The application process involves public consultation where the CEO invites submissions, although no submissions were received for Tariff Concession Order No. 0501085 concerning train track parts. Once issued, a TCO applies from the date the application was lodged, and it does not retroactively affect the rights of persons other than the Commonwealth, nor does it impose any liabilities. Importers, however, may benefit by applying for a refund of duty on goods imported since the effective date of the TCO. The scope of the TCO is limited to the goods specified in the order, with no broader application to other goods or industries unless similarly applied for and granted.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0501085 under the Customs Act 1901 include sections 269C, 269F, 269K, 269P, and 269S, among others. Section 269F allows for the application of Tariff Concession Orders (TCO) by a person to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application is valid and meets the core criteria set out in section 269C, the CEO must make a written order (a TCO) declaring that the goods in question are eligible for a lower rate of customs duty. Section 269K mandates that the CEO must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made. Section 269P outlines the process for the CEO to make a TCO if the application meets the core criteria, and section 269S specifies the effective date of the TCO as the date the application was lodged.
The Act imposes specific obligations and requirements on the CEO regarding the consideration and processing of TCO applications. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also determine if the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged. Definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Upon satisfying these criteria, the CEO is required to make a written TCO and publish a notice in the Gazette inviting any objections or submissions from interested parties.
In the event of a breach of the provisions outlined in the Customs Act 1901 or any related regulations, various penalties and consequences may apply. While the explanatory statement does not specify the exact penalties for breaches of the Tariff Concession Orders, general penalties for breaches of the Customs Act can include fines and imprisonment. For instance, under section 231A of the Customs Act, a person who contravenes the Act may be liable for a penalty of up to 10,000 penalty units, or imprisonment for up to five years, or both, for a serious offence. The Act also provides for civil penalties for less serious breaches, which can vary depending on the nature and severity of the offence. The imposition of these penalties is determined by the relevant courts and enforcement agencies in accordance with the statutory provisions.