EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712821
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.
Air Brake Corporation Of Australia Pty Limited applied for a TCO in respect of certain air brake tubing on 13 August 2007.
Instrument
TCO No 0712821 was made on 29 October 2007. It declares that those certain air break tubings 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. 0712821 is taken to have come into force on 13 August 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 to provide a comprehensive framework for the regulation of customs and excise duties in Australia. In particular, it introduced the mechanism for Tariff Concession Orders (TCOs) through Part XVA, addressing the gap in providing tariff relief for imported goods that are not produced domestically. The Tariff Concession Instrument No. 0712821 was made under this Act to provide tariff concessions for certain air brake tubing, recognising that no substitutable goods were produced in Australia at the time of the application. This instrument was enacted by the Chief Executive Officer of Customs, following a valid application by Air Brake Corporation Of Australia Pty Limited on 13 August 2007. The policy objective, as articulated in the explanatory statement, was to ensure that importers could benefit from a lower rate of duty, in this case, a reduction from 5% to free, thereby encouraging trade and potentially reducing costs for businesses utilising these goods. The instrument was effective from the date of the application, 13 August 2007, and did not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0712821, pursuant to the Customs Act 1901, applies to a specific set of goods, namely certain air brake tubings, as identified in the instrument. The act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the customs duty on goods, provided the application for such concessions meets the core criteria outlined in the Act. The primary criterion, as stated in section 269C of the Act, is that no substitutable goods should be produced in Australia in the ordinary course of business. The instrument extends its application to the particular goods for which Air Brake Corporation Of Australia Pty Limited applied on 13 August 2007, and it was registered on the same day it was lodged, in line with subsection 269S(1) of the Act. This instrument does not impose any liabilities on persons, including importers, and provides beneficial rights to importers who can apply for a refund of duty on goods imported since the effective date of the TCO. The scope of this legislation is limited to the specific goods mentioned and does not extend to other goods or industries unless similarly applied for and approved.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0712821, establish the criteria and process for granting tariff concession orders (TCOs) under section 269F of the Customs Act 1901 (the Act). If an application for a TCO is submitted and the Chief Executive Officer of Customs (the CEO) determines that the goods are not excluded under section 269SJ, they must then assess whether the application meets the core criteria outlined in section 269C. This requires a determination that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO is satisfied that these conditions are met, they must issue a written TCO, specifying the goods and the applicable rate of duty as set out in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties or entities it governs include the requirement for any applicant to ensure their application for a TCO is valid and meets the core criteria as outlined in the Act. The CEO, upon receiving a valid application, is mandated to publish a notice in the Gazette, inviting any interested parties to submit their views on whether the TCO should proceed. Additionally, the CEO must make a written TCO if the application satisfies the specified conditions. Importers of the goods subject to the TCO must comply with the Act by potentially applying for a refund of duty on goods imported since the date the TCO is taken to have come into force.
The legislation also outlines the consequences of breaching its provisions. While the explanatory statement does not detail specific offences, penalties, or consequences for non-compliance, it is reasonable to infer that any breach of the conditions for a TCO or misuse of the concessions granted could lead to civil or criminal penalties. These might include fines or other sanctions as prescribed by the Customs Act 1901 or other related laws. The exact penalties would depend on the nature and severity of the breach, but could include financial penalties and, in severe cases, criminal charges.