EXPLANATORY STATEMENT
Tariff Concession Instrument No.0503095
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.
BHP Billiton Iron Ore Pty Ltd applied for a TCO in respect of certain diesel electric locomotives on 16 March 2005.
Instrument
TCO No 0503095 was made on 20 May 2005. It declares that those certain diesel electric locomotives 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 0%.
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.0503095 is taken to have come into force on 16 March 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 regulatory framework governing customs duties and related matters within Australia. One of the notable aspects of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs to offer tariff concessions on certain goods. The problem or gap this Act aimed to address includes the need for a streamlined process to provide duty relief on goods that are not produced domestically, thereby encouraging the importation of such goods and potentially fostering economic benefits. The instrument, F2005L01261, was introduced by the relevant legislature to facilitate this process, ensuring that the application and approval of TCOs are transparent and accessible. The policy objective, as outlined in the explanatory statement, is to ensure that the CEO can effectively manage TCO applications and that the rights of all parties, particularly importers, are safeguarded during the process. The instrument was designed to come into effect on the date the application was lodged, ensuring timely benefits for importers.
Scope and Application
The Tariff Concession Instrument No. 0503095 pertains to the Customs Act 1901, which is an Australian federal statute. This legislation applies to any entity or person seeking a tariff concession order (TCO) for specific goods, where the application aligns with the core criteria set out in section 269C of the Act. This includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged, as defined in section 269D. The instrument’s jurisdictional reach is national, as it falls under the purview of the Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ, which lists goods that are ineligible for a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations, which provide further detail on the implementation and administration of the TCO scheme. The commencement date of this particular TCO is 16 March 2005, the date on which the application was lodged, in accordance with subsection 269S(1) of the Act. The TCO does not adversely affect any person’s rights as of the registration date, nor does it impose liabilities on any person for actions taken prior to registration.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA, which enables the Chief Executive Officer of Customs (the CEO) to reduce customs duties on specified goods (s 269F). To qualify for a TCO, the goods must not be substitutable by any goods produced in Australia in the ordinary course of business (s 269C). For the purposes of this legislation, 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are defined in sections 269D, 269E, and 269F respectively. If an application meets the core criteria, the CEO is required to make a written order (TCO) declaring that the goods specified in the application are subject to a prescribed tariff item (s 269P(3)). In the case of TCO No. 0503095, certain diesel electric locomotives are subject to a tariff concession, reducing the duty from 5% to 0%.
The Act imposes several obligations on the CEO and applicants for a TCO. The CEO must publish a notice in the Gazette inviting submissions from any person who might oppose the TCO (s 269K(1)). In the instance of TCO No. 0503095, no submissions were received. The CEO must also ensure that the application meets the core criteria before making a TCO, which includes verifying that no substitutable goods are produced in Australia (s 269C). Additionally, the TCO is effective from the date the application is lodged (s 269S(1)), ensuring that any rights of the parties are preserved from that date forward.
Failure to comply with the requirements of the Act can result in legal consequences. However, the explanatory statement does not detail specific offences, penalties, or consequences for breaches of the Act. Typically, breaches of customs legislation can lead to significant financial penalties and potential criminal charges. The exact penalties depend on the nature and severity of the breach and are subject to the specific provisions of the Customs Act 1901 and any applicable regulations. The absence of explicit penalties in this statement does not diminish the potential seriousness of non-compliance.