EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515071
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 windscreen wipers on 31 October 2005.
Instrument
TCO No 0515071 was made on 23 January 2006. It declares that those certain locomotive windscreen wipers 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. 0515071 is taken to have come into force on 31 October 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 facilitate the regulation of customs and excise duties in Australia. The Act provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for lower rates of customs duty on specified goods. This particular instrument, Tariff Concession Instrument No. 0515071, was introduced to address a specific application by Knorr-Bremse Australia Pty Limited for tariff concessions on certain locomotive windscreen wipers. Enacted by the Parliament of Australia, the policy objective behind this legislation is to provide tariff relief on goods that are not substitutable by domestically produced alternatives, thereby encouraging the importation of these specific items. The TCO, which came into effect on 31 October 2005, applies a free rate of duty on the specified locomotive windscreen wipers, significantly benefiting the rights of importers under the Customs Act.
Scope and Application
The Tariff Concession Instrument No. 0515071 under the Customs Act 1901 applies to goods specified in the instrument, namely certain locomotive windscreen wipers, and the entities involved in importing these goods. The instrument extends to the Commonwealth and is made under the authority provided by Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to grant tariff concessions on certain goods. The instrument’s reach is national, as it pertains to the entire Australian Customs jurisdiction. It is important to note that the application of this instrument is contingent on the core criteria set out in section 269C of the Act, which mandates that no substitutable goods were produced in Australia at the time the application was lodged. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals other than the Commonwealth in respect of actions taken before the instrument's registration. The application of this instrument may be extended or modified through subordinate instruments, such as regulations or further orders under the Customs Act 1901.
Key Provisions
The Tariff Concession Order (TCO) No. 0515071, made under section 269F of the Customs Act 1901, is significant because it grants tariff concessions for specific goods. In this case, the order applies to certain locomotive windscreen wipers (section 269P(3)). The primary effect of the TCO is to reduce the customs duty rate for these goods from the general rate of 5% to a rate of duty that is free (section 269P(3)). This concession is contingent on the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Substitutable goods, as defined by section 269D, are those produced in Australia that could be used in the same way as the goods in question.
Entities affected by this TCO, particularly importers of locomotive windscreen wipers, have specific obligations under the Customs Act 1901. Importers must ensure that the goods they import are subject to the TCO and that they apply for a refund of any duty paid on these goods since the effective date of the TCO, which is 31 October 2005 (subsection 269S(1), Regulations paragraph 126(1)(r)). The Chief Executive Officer of Customs must publish a notice in the Gazette inviting submissions regarding the TCO application, although no submissions were received in this instance (subsection 269K(1)).
There are no direct offences or penalties specified within the TCO itself for non-compliance with the tariff concessions. However, any misrepresentation or failure to correctly apply for the tariff concession could potentially lead to civil or criminal consequences under other provisions of the Customs Act 1901 or related legislation. For instance, knowingly making a false statement to obtain a tariff concession could result in penalties under the Crimes Act 1914, including fines or imprisonment. The specific penalties would depend on the nature and severity of the breach.