EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612793
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.
Queensland Rail applied for a TCO in respect of certain electric locomotives on 1 August 2006.
Instrument
TCO No 0612793 was made on 20 October 2006. It declares that those certain 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. 0612793 is taken to have come into force on 1 August 2006.
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 Tariff Concession Instrument No. 0612793, enacted in 2006, is a specific measure under the Customs Act 1901 designed to provide tariff concessions for particular goods. This instrument was introduced to address the need for tariff relief for certain imported goods that do not have Australian-produced equivalents, thereby encouraging the importation of these goods by reducing customs duty. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the duty on specified goods if certain criteria are met. This particular TCO, made on 20 October 2006, applies to certain electric locomotives and reduces their duty rate from 5% to 0%, as determined by the CEO after reviewing an application from Queensland Rail and finding no substitutable goods produced in Australia. The policy objective of this legislation is to facilitate the import of goods that are not locally produced, thus potentially benefiting importers by reducing their duty burden and encouraging competition and efficiency within the market.
Scope and Application
The Tariff Concession Instrument No. 0612793 is a legislative instrument made under the Customs Act 1901, which applies to entities or individuals seeking tariff concessions on imported goods. Specifically, this Instrument applies to the particular case of Queensland Rail, which sought and received a tariff concession for certain electric locomotives. The Instrument is designed to provide a lower rate of customs duty on the specified goods, provided the application meets the core criteria set out in section 269C of the Customs Act 1901. The Instrument's geographic reach is national, as it applies to goods imported into Australia. However, the Instrument does not impose any liabilities on any person and does not disadvantage any person other than the Commonwealth. The Instrument came into effect on 1 August 2006, the date on which the application was lodged. The Instrument does not affect the rights of any person other than the Commonwealth as at the date of registration. The CEO did not receive any submissions in response to the invitation to lodge a submission regarding the Tariff Concession Instrument No. 0612793.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901 (the Act). Section 269F allows for the application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order, a TCO, as per section 269P(3).
The Act imposes several obligations and requirements on parties and entities it governs. The CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Once an application is deemed valid, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO, as per subsection 269K(1) of the Act. Additionally, the CEO must determine whether the application meets the core criteria under section 269C of the Act. The CEO must also ensure that the TCO does not affect the rights of any person, except the Commonwealth, in a way that disadvantages them or imposes liabilities regarding actions taken before the date of registration, as per subsection 269S(1) of the Act.
In terms of potential breaches and consequences, the Act does not explicitly outline specific offences or penalties related to the making or non-compliance of a TCO. However, failure to adhere to the Act’s requirements, such as improper application processes or not fulfilling the obligations imposed by the Act, may lead to administrative actions or legal consequences under the general provisions of the Act or related legislation. The consequences could include financial penalties, fines, or other enforcement actions that may be pursued against any person or entity found to be in breach of the Act’s provisions.