EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711575
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.
Bradken Resources Pty Ltd applied for a TCO in respect of certain coal wagon and/or iron ore car parts on 18 July 2007.
Instrument
TCO No 0711575 was made on 21 September 2007. It declares that those certain coal wagon and/or iron ore car parts 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. 0711575 is taken to have come into force on 18 July 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the import and export of goods, among other things. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain goods. Tariff Concession Instrument No. 0711575, made under section 269C of the Customs Act 1901, was introduced to address the specific needs of Bradken Resources Pty Ltd, which applied for a tariff concession on certain coal wagon and/or iron ore car parts. The core objective of this instrument was to provide relief to Bradken Resources by reducing the customs duty rate on these specific goods from the general rate of 5% to 0%, as no substitutable goods were being produced in Australia at the time of the application. The instrument was made by the Chief Executive Officer of Customs, who determined that the application met the core criteria as stipulated in the Act. This initiative was intended to support the business operations of Bradken Resources without disadvantaging other parties, and it came into effect on the date of the application, 18 July 2007.
Scope and Application
The Tariff Concession Order No. 0711575 under the Customs Act 1901 applies specifically to certain coal wagon and iron ore car parts imported into Australia. The instrument was made to provide tariff concessions, reducing the customs duty rate from 5% to 0% for these specific goods. The application for this concession was made by Bradken Resources Pty Ltd on 18 July 2007, and the order was made on 21 September 2007 by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. The order came into effect on the same day the application was lodged, 18 July 2007, and it does not affect any rights or impose any liabilities on persons other than the Commonwealth for actions taken prior to the order’s registration. Importers of these goods stand to benefit from this concession, with the potential to apply for a refund of duty on goods imported since the commencement date of the order.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0711575 under the Customs Act 1901 (section 269F) detail the process for applying for a Tariff Concession Order (TCO) and the criteria for the Chief Executive Officer of Customs (CEO) to approve such an application. Section 269C states that an application meets the core criteria if, on the day it is lodged, no substitutable goods were produced in Australia in the ordinary course of business. This means that the goods in question cannot be replaced by Australian-made alternatives that serve the same purpose, including any design use. Section 269B clarifies that 'goods produced in Australia' and 'ordinary course of business' are defined elsewhere in the Act, while 'substitutable goods' are goods produced in Australia that can be used interchangeably with the goods for which the TCO is being sought.
The obligations imposed by this legislation include the requirement for the CEO to assess whether an application for a TCO meets the core criteria (section 269F). If the CEO determines that the application does meet these criteria, they must make a written order (section 269P(3)) specifying that the goods in question are subject to a particular item of Schedule 4 to the Customs Tariff Act 1995, effectively granting a tariff concession. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received.
The consequences for breach of this legislation are not explicitly detailed within the provisions of the Customs Act 1901 or the explanatory statement. However, general principles of administrative law may apply, including the potential for judicial review of decisions made by the CEO. Any misuse or non-compliance with the terms of the TCO could lead to civil or criminal penalties under other relevant laws, although specific maximum penalties are not provided in this context. The TCO itself does not impose any liabilities on any person and does not affect the rights of persons (other than the Commonwealth) as at the date of registration.