EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803608
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.
John Holland Pty Ltd applied for a TCO in respect of certain tunnel locomotives on 11 April 2008.
Instrument
TCO No 0803608 was made on 4 July 2008. It declares that those certain tunnel locomotives 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. 0803608 is taken to have come into force on 11 April 2008.
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, is a foundational piece of legislation governing the administration of customs and excise duties. It includes provisions for the establishment of Tariff Concession Orders (TCOs) under Part XVA, which allow for the application of reduced customs duty rates on certain goods. This mechanism was introduced to address the need for tariff concessions in cases where no substitutable goods are produced in Australia, thereby encouraging the importation of goods that are not domestically produced. The Act empowers the Chief Executive Officer of Customs to make such orders upon meeting specific criteria, as outlined in section 269C. For instance, in the case of John Holland Pty Ltd's application for a TCO concerning tunnel locomotives, the CEO determined that no substitutable goods were produced in Australia, leading to the concession of a 5% duty rate to free. The instrument, TCO No. 0803608, was published in the Gazette with no objections received, and it came into effect on the date the application was lodged, 11 April 2008. This legislative framework ensures that the rights of importers are protected and potentially benefited by such tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0803608 under the Customs Act 1901 applies to specific goods, in this instance, certain tunnel locomotives, which are the subject of an application for a Tariff Concession Order (TCO). The Act applies to any entity or individual seeking a concession on the customs duty for imported goods, provided that these goods are not specified in section 269SJ of the Act as ineligible for TCOs. The application must meet core criteria, such as the absence of substitutable goods produced in Australia at the time of application. The geographical scope of the Act is national, as it pertains to the importation of goods into Australia and the application of customs duties. However, the TCO itself does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person. The Act also allows for the extension or restriction of its application through subordinate instruments, which may further define the eligibility criteria for TCOs or specify additional conditions. The commencement of the TCO is effective from the date the application is lodged, ensuring timely application of the tariff concession.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer (CEO) of Customs (sections 269F, 269C, 269B, and 269P(3)). An application for a TCO can be made by a person who wishes to have a lower rate of customs duty applied to certain goods (section 269F). The CEO must consider the application against the core criteria, which include the absence of substitutable goods being produced in Australia in the ordinary course of business (section 269C). If these criteria are met, the CEO is required to issue a written order, or TCO, specifying the lower duty rate for the specified goods (section 269P(3)). In this instance, TCO No. 0803608 was issued on 4 July 2008, applying to certain tunnel locomotives which are now subject to a free rate of duty, down from the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by the Act on the parties involved include the requirement for the CEO to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested party to lodge a submission if they believe the TCO should not proceed (subsection 269K(1)). The CEO must then consider any submissions received before making a final decision. In the case of TCO No. 0803608, no submissions were received. Additionally, the Act ensures that the TCO does not adversely affect the rights of any person, other than the Commonwealth, in relation to actions taken before the TCO's effective date (subsection 269S(1)). Importers will benefit from this, as they can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
Breaches of the provisions outlined in the Customs Act 1901 can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties under this particular TCO, general provisions within the Customs Act may include fines and imprisonment for offences related to customs duty evasion, fraudulent importation, and other related breaches. The exact penalties would depend on the nature and severity of the offence, as outlined in other sections of the Customs Act and any relevant regulations. It is important for all parties to adhere to the requirements and obligations set forth in the Act to avoid potential legal repercussions.