EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618384
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.
Imtram Pty Ltd applied for a TCO in respect of certain railway point controllers and signallers on 09 November 2006.
Instrument
TCO No 0618384 was made on 19 January 2007. It declares that those certain railway point controllers and signallers 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. 0618384 is taken to have come into force on 09 November 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation was introduced to provide a mechanism for the reduction or waiver of customs duties on certain goods, under specific conditions, thereby facilitating trade and potentially lowering costs for businesses importing these goods. The primary objective of the Act, as outlined in the explanatory statement for Instrument No. 0618384, is to ensure that a TCO is granted only when it is established that no substitutable goods are produced in Australia in the ordinary course of business. This policy aims to protect Australian industries from undue competition and to provide relief to importers of specified goods, thereby promoting fair trade practices.
Scope and Application
The Customs Act 1901, through Part XVA, provides the framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods. This applies to individuals or entities that apply for such concessions, provided that the goods in question are not listed in section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The scope of this legislation extends to all entities and individuals who import goods and seek tariff concessions, with the application process outlined in sections 269C and 269F. The CEO must determine if no substitutable goods are produced in Australia before granting a concession, as defined by sections 269D and 269E. Once the core criteria are satisfied, a TCO is issued under section 269P(3), which can significantly alter the duty rates as per Schedule 4 of the Customs Tariff Act 1995. The legislation also mandates public consultation through the Gazette as per section 269K(1), although in this case, no submissions were received. The commencement date of the TCO is the date of the application, as per subsection 269S(1), ensuring that the rights of the Commonwealth and importers are protected without imposing new liabilities.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0618384 under the Customs Act 1901 involve the establishment of a tariff concession order (TCO) for certain railway point controllers and signallers, as outlined in sections 269C, 269F, and 269P(3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, which is defined in section 269C as no substitutable goods being produced in Australia in the ordinary course of business, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties governed by it include the requirement for the CEO to decide whether an application for a TCO meets the core criteria and, if satisfied, to make a written order declaring the goods to which the TCO applies. This is further supported by section 269K(1) which mandates the CEO to publish a notice in the Gazette inviting submissions on the TCO application. Intram Pty Ltd, as the applicant, must have provided sufficient evidence to support their application, demonstrating that no substitutable goods were produced in Australia.
In terms of offences, penalties, or civil/criminal consequences, the Act does not specify particular penalties for failure to comply with the TCO provisions. However, any failure to adhere to the terms of the TCO could result in the affected party losing eligibility for the tariff concession, potentially leading to higher duties on the goods in question. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, as specified under section 269S(1). Importers, who are beneficiaries of the TCO, can apply for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person, ensuring that the concessions are only applicable to the goods specified in the order.