EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807950
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 Ltd applied for a TCO in respect of certain locomotive inertial filters on 13 May 2008.
Instrument
TCO No 0807950 was made on 25 July 2008. It declares that those certain locomotive inertial filters 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. 0807950 is taken to have come into force on 13 May 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 Tariff Concession Instrument No. 0807950 was enacted in 2008 under the Customs Act 1901, to address the issue of applying for tariff concessions on specific goods that are not produced in Australia. This instrument facilitates the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on goods that meet the specified criteria. Queensland Rail Ltd applied for this concession on certain locomotive inertial filters, which was subsequently approved by the CEO, resulting in a TCO being issued on 25 July 2008. This legislative action ensures that the rights of importers are positively impacted, providing them with the opportunity to apply for a refund of duty on goods imported since the effective date of the TCO, which is considered to be the date the application was lodged. The process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received.
Scope and Application
The Tariff Concession Instrument No. 0807950, made under the Customs Act 1901, applies to a specific set of goods, namely certain locomotive inertial filters, for which Queensland Rail Ltd applied for tariff concessions on 13 May 2008. The application was processed by the Chief Executive Officer of Customs, who determined that the goods were eligible for a tariff concession order (TCO) as no substitutable goods were produced in Australia on the date the application was lodged. The TCO, which came into effect on 13 May 2008, establishes that these locomotive inertial filters are subject to a free rate of customs duty, as opposed to the general rate of 5%. The scope of this instrument is limited to the specified goods and does not affect the rights of any person as at the date of registration, ensuring no person (other than the Commonwealth) is disadvantaged or imposed liabilities for actions taken prior to the TCO's effective date. The TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0807950 under the Customs Act 1901 (section 269F) relate to the establishment of a Tariff Concession Order (TCO) for certain locomotive inertial filters. Section 269C stipulates that the Chief Executive Officer (CEO) of Customs must consider whether a TCO application meets the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If the criteria are met, the CEO is mandated to issue a TCO (section 269C), as demonstrated in the case of the locomotive inertial filters, where the CEO declared that these goods are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty-free status (section 269P(3)). The general rate of duty on these goods is 5%, but under the TCO, they are subject to a free rate of duty (section 269P(3)).
The obligations imposed on parties or entities by this Act include the requirement for Queensland Rail Ltd to apply for a TCO if they wish to benefit from the concession (section 269F). The CEO must then determine whether the application meets the core criteria, including the absence of substitutable goods produced in Australia (section 269C). Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties regarding the proposed TCO (subsection 269K(1)). In this instance, no submissions were received. The TCO itself obligates the Commonwealth to ensure that the specified goods are exempt from the general customs duty rate (section 269P(3)).
In terms of consequences for breach, the Act does not specify offences directly related to the TCO process itself. However, if any party engages in fraudulent activities to obtain a TCO, they may face criminal penalties under other sections of the Customs Act 1901, such as section 228, which deals with false statements and fraudulent conduct. Additionally, the Act ensures that the TCO does not affect the rights of any person, except the Commonwealth, in respect of anything done or omitted before the TCO's effective date (subsection 269S(1)). This means that no liabilities are imposed on any person, and the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).