EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709548
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 trailers on 20 June 2007.
Instrument
TCO No 0709548 was made on 24 August 2007. It declares that those certain railway trailers 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. 0709548 is taken to have come into force on 20 June 2007.
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. 0709548 was enacted in 2007 under the Customs Act 1901, which is administered by the Parliament of Australia. This legislation was introduced to address the issue of providing tariff concessions for specific goods that are not produced domestically, thereby ensuring fair trade practices and economic benefits. The explanatory statement outlines the process of applying for a Tariff Concession Order (TCO), where the Chief Executive Officer of Customs assesses whether a particular application meets the core criteria, particularly focusing on the absence of substitutable goods produced in Australia. In the case of Intram Pty Ltd’s application for certain railway trailers, the CEO determined that no such domestic substitutes existed, leading to the issuance of TCO No. 0709548. This order, which came into effect on the date of application, grants a duty-free status to the specified goods, enhancing the competitive advantage for importers without retroactively affecting pre-existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0709548, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which a lower rate of customs duty is set, provided certain criteria are met. The application for a TCO is open to any person who can demonstrate that the goods in question are not prohibited under section 269SJ of the Act and that no substitutable goods are produced in Australia. Upon approval, the CEO issues a written order that effectively changes the duty rate for the specified goods, as outlined in Schedule 4 of the Customs Tariff Act 1995. This legislative instrument applies nationally and is not limited by state or territory boundaries. The TCO does not impact the rights of any person as of the registration date, ensuring that no individual or entity is disadvantaged or subjected to new liabilities by the concession.
In the case of Intram Pty Ltd's application for railway trailers, the CEO assessed that no substitutable goods were produced domestically, thus satisfying the core criteria. The TCO, which came into force on the date of application, grants a zero-rate duty for these trailers, significantly benefiting importers who can now apply for refunds on duties paid since the effective date of the order. The process includes a mandatory publication in the Gazette inviting public submissions, although none were received in this instance. The scope of the TCO is further extended and refined through subordinate instruments and regulations, ensuring comprehensive application and enforcement.
Key Provisions
The Customs Act 1901, specifically under Part XVA, governs the process for issuing Tariff Concession Orders (TCOs) (section 269C). The primary operative section, 269F, allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO determines that the application pertains to goods that are not restricted by section 269SJ, the CEO must assess whether the application meets the core criteria. Section 269C specifies that the core criteria are satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269E). Substitutable goods are defined in section 269D as goods produced in Australia that can be used for the same purpose as the goods subject to the TCO application.
The Act imposes several obligations on the parties involved. For example, any person wishing to apply for a TCO must ensure that their application complies with the conditions set out in section 269F. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO if the application meets the core criteria. This process is further governed by definitions provided in sections 269D, 269E, and 269F, ensuring clarity and consistency in the application process.
Breaching the requirements of the Customs Act 1901, particularly in the context of TCOs, can result in both civil and criminal consequences. While the explanatory statement does not detail specific offences under the Act, it is understood that failure to comply with the regulations governing TCOs could result in penalties. For example, providing false information in an application could lead to fines or other civil penalties. In more serious cases, criminal penalties might apply, although the maximum penalties are not specified in this particular explanatory statement. Importers and applicants must ensure they adhere to the statutory requirements to avoid any legal repercussions.