EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807952
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.
QR Limited applied for a TCO in respect of certain locomotive brake rack assemblies on 13 May 2008.
Instrument
TCO No 0807952 was made on 01 August 2008. It declares that those certain locomotive brake rack assemblies 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. 0807952 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 Customs Act 1901, enacted by the Australian Parliament, includes provisions for the implementation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce customs duty rates on certain goods. This was introduced to address the need for tariff concessions where Australian-produced substitutable goods do not exist, thereby encouraging imports of specific goods for economic efficiency. The explanatory statement details the process and criteria for the application and approval of a TCO, including the requirement that no substitutable goods be produced in Australia at the time of application. TCO No. 0807952, effective from 13 May 2008, was made in response to an application from QR Limited for locomotive brake rack assemblies, resulting in a reduction of customs duty from 5% to free. The instrument was published in the Gazette with no objections received, ensuring transparency and fairness in the process.
Scope and Application
The Tariff Concession Instrument No. 0807952 is an instrument made under Part XVA of the Customs Act 1901, which allows for the reduction or exemption of customs duty on specific goods. This instrument applies to goods for which a Tariff Concession Order (TCO) is sought and granted, and it specifically relates to certain locomotive brake rack assemblies for which QR Limited applied on 13 May 2008. The TCO applies to the goods specified in the order, namely certain locomotive brake rack assemblies, and it is applicable from the date the application was lodged, 13 May 2008. The geographical reach of this Act is national, as it pertains to customs duty within Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which are goods that cannot be subject to a TCO. The instrument may be extended or restricted through subordinate instruments, although no such extensions or restrictions are mentioned in the explanatory statement for this particular TCO.
Key Provisions
The main sections of the legislation, specifically within the Customs Act 1901, allow for the creation of Tariff Concession Orders (TCOs) under section 269F (1). This permits an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a concession on customs duties for certain goods. Once the CEO is satisfied that the application pertains to goods not excluded under section 269SJ, they must assess whether the application meets the core criteria outlined in section 269C. The assessment hinges on the absence of substitutable goods produced in Australia at the time the application was lodged, as defined by sections 269B, 269D, and 269E. If these criteria are met, the CEO is required to issue a TCO under section 269P(3), which specifies the reduced duty on the goods.
The obligations under the Act are clear for the entities involved. The CEO must ensure that any TCO application is not for goods that fall under the exclusions listed in section 269SJ and must verify the absence of substitutable goods in Australia at the time of the application, as per section 269C. The CEO is also mandated to publish a notice in the Gazette inviting submissions from any interested parties, as stipulated in subsection 269K(1). Furthermore, the TCO is deemed to come into effect from the date the application is lodged, as per subsection 269S(1).
Breaching the conditions set forth in the Customs Act 1901 may lead to various consequences. While the legislation does not explicitly detail penalties for non-compliance, it implies that any improper application or failure to meet the criteria could result in the CEO denying the TCO. For the applicant, this could mean that the intended duty concession is not granted. Additionally, any subsequent misuse of a TCO, such as applying for a refund for goods not subject to the order, could lead to further scrutiny and potential legal repercussions. The Act ensures that the rights of importers are positively affected by the TCO, and any liabilities incurred prior to the TCO's effective date are not imposed on any person, as per the provision in section 269S.