EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509435
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.
Knorr-Bremse Australia Pty Limited applied for a TCO in respect of certain locomotive bogie brake parts on 15 July 2005.
Instrument
TCO No 0509435 was made on 21 October 2005. It declares that those certain locomotive bogie brake 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. 0509435 is taken to have come into force on 15 July 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, enacted by the Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act addresses the need for a streamlined process to provide tariff concessions for specific goods, ensuring that Australian businesses can access imported goods at reduced duty rates where domestic production does not meet demand or where such production is not feasible. The policy objective behind this mechanism is to foster economic efficiency and support industries by lowering costs associated with importing certain goods, thereby enhancing competitiveness. The explanatory statement highlights that TCO No. 0509435 was introduced to provide tariff concessions for specific locomotive bogie brake parts, effectively reducing the duty from 5% to free, reflecting the absence of substitutable goods produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0509435 under the Customs Act 1901 applies to the importation of certain locomotive bogie brake parts, specifically to the entities and individuals involved in importing these goods. The legislation facilitates the reduction of customs duty on these particular goods to zero, provided that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it is a Commonwealth legislation that applies across Australia. The Act provides for the application of a lower rate of customs duty for goods that meet the criteria specified in the Act and are subject to a Tariff Concession Order made by the Chief Executive Officer of Customs. The exclusions include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act may be further extended or restricted through subordinate instruments, as per the provisions in the Customs Act 1901. This legislation ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force, without imposing any liabilities on any person.
Key Provisions
The main operative sections of this legislation, namely the Tariff Concession Instrument No. 0509435, declare that certain locomotive bogie brake parts are goods to which item 50 of Schedule 4 to the Tariff applies (section 269P(3)). This means that these specific goods are now subject to a tariff concession, effectively granting them a lower rate of customs duty. Under this instrument, the general rate of duty on these goods is reduced to free, as opposed to the usual 5% (section 269P(3)). The CEO must make a written order declaring the specified goods as subject to this tariff concession, provided the core criteria are met, such as the absence of substitutable goods produced in Australia (section 269C).
The Act imposes several obligations and requirements on the parties involved. Firstly, it mandates that any person seeking a tariff concession order must apply to the CEO (section 269F). The CEO, upon receiving a valid application, must determine if the application meets the core criteria (section 269C). If satisfied, the CEO must issue a written order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, giving them an opportunity to be heard (subsection 269K(1)). The TCO itself does not affect existing rights or impose new liabilities on persons other than the Commonwealth (subsection 269S(1)).
In terms of breaches and consequences, the Act does not explicitly detail offences or penalties within the text provided. However, failure to comply with the requirements or obligations outlined, such as improper applications for TCOs or non-compliance with publication requirements, could potentially lead to legal actions or administrative penalties. While the exact penalties are not specified in the provided text, breaches of customs regulations generally may attract civil or criminal penalties, including fines or imprisonment, depending on the severity and intent of the breach.
The Act ensures that the TCO does not disadvantage any person other than the Commonwealth or impose new liabilities on them, maintaining the status quo for those affected by the legislation (subsection 269S(1)). This protection ensures that rights as they stood at the date of registration are preserved, providing clarity and security to those involved in importing or dealing with the specified goods.