EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620138
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 locomotive main generators on 22 December 2006.
Instrument
TCO No 0620138 was made on 16 March 2007. It declares that those certain locomotive main generators 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. 0620138 is taken to have come into force on 22 December 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, provides the framework for the administration of customs and excise in Australia, including the establishment of a scheme for Tariff Concession Orders (TCOs). The Act was introduced to streamline the customs duty process and provide relief to certain importers, particularly where goods are not produced in Australia or where substitutable goods are not readily available. Under the authority of section 269F of the Act, the Chief Executive Officer of Customs (CEO) can grant a TCO to reduce or waive customs duty on specific goods if it is determined that no substitutable goods are produced in Australia. This was designed to support industries by reducing the cost of imported goods that have no domestic equivalent, thereby facilitating trade and economic efficiency. The CEO's decision to grant a TCO must adhere to the core criteria outlined in section 269C of the Act, ensuring that the concession is appropriate and does not undermine domestic production.
Scope and Application
The Tariff Concession Instrument No. 0620138 is an instrument under Part XVA of the Customs Act 1901, which pertains to the scheme for making Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any entity or individual seeking tariff concessions for specific goods that meet the criteria outlined in the Act. The primary application of this instrument is to ensure that lower rates of customs duty apply to goods specified in a TCO. The geographic reach of this legislation is national, as it operates under the Commonwealth’s purview, although it impacts importers and other entities across Australia. The instrument does not apply to goods specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. The application process involves meeting the core criteria, including the absence of substitutable goods produced in Australia at the time of application, as per section 269C. The TCO No. 0620138, which came into effect on 22 December 2006, specifically provides a free rate of duty for certain locomotive main generators, which otherwise have a general duty rate of 5%. The rights of the Commonwealth and importers are preserved, and no existing liabilities are imposed on any person by this concession.
Key Provisions
The Customs Act 1901 provides for the establishment of Tariff Concession Orders (TCOs) under section 269F, which can be applied for by any person to the Chief Executive Officer of Customs (CEO). If an application for a TCO is deemed to meet the core criteria (sections 269C and 269P(3)), the CEO must make a written order that grants tariff concessions on the specified goods. For instance, TCO No. 0620138 applies to certain locomotive main generators, reducing the duty rate from the general rate of 5% to free (section 269P(3)).
The Act imposes certain obligations on the parties involved. The CEO must ensure that the goods specified in a TCO application are not listed in section 269SJ, which excludes certain goods from tariff concessions. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order (section 269C). Moreover, once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). This ensures transparency and allows interested parties to voice their concerns.
In the case of TCO No. 0620138, the CEO did not receive any submissions in response to the Gazette notice, indicating that no objections were raised against the concession. The TCO is considered to have come into force on the day the application was lodged (subsection 269S(1)), in this case, 22 December 2006. Importantly, the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, ensuring that no one is disadvantaged or has liabilities imposed upon them for actions taken prior to the TCO's effective date.
Failure to comply with the provisions of the Customs Act 1901 and the related regulations may result in various civil and criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally attract penalties under the Crimes Act 1914. For example, unauthorised importation or exportation of goods can result in fines and imprisonment, with the severity of the penalties depending on the value of the goods and the intent behind the breach. Additionally, the Commissioner of Customs has the authority to recover any unpaid duty or tax, along with applicable interest and penalties, from the person liable for the duty or tax.