EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807953
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 brake blocks on 13 May 2008.
Instrument
TCO No 0807953 was made on 25 July 2008. It declares that those certain locomotive brake blocks 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. 0807953 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. 0807953, enacted in 2008, is a part of the broader Customs Act 1901, designed to facilitate the importation of specific goods by granting tariff concessions. This instrument was introduced to address the need for streamlined processes in applying for and obtaining tariff concessions for goods that do not have substitutable alternatives produced within Australia. The instrument allows the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) for goods that meet certain criteria, thereby reducing the customs duty rate for those goods. The policy objective of this measure is to promote economic efficiency by ensuring that goods for which there is no domestic production are imported at a lower cost, thus benefiting businesses and potentially consumers by reducing the overall price of these goods.
The instrument was enacted by the relevant authority within the framework of the Customs Act 1901 and was introduced without any adverse effects on the rights of persons other than the Commonwealth, ensuring that it does not disadvantage existing parties or impose new liabilities. The implementation of TCO No. 0807953, which concerns certain locomotive brake blocks, exemplifies the application of these provisions, allowing for the importation of these goods at a reduced duty rate of free, as opposed to the general rate of 5%, reflecting the absence of substitutable goods produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0807953 applies to Queensland Rail Ltd and specifically to certain locomotive brake blocks, as per the application submitted to the Chief Executive Officer of Customs under the Customs Act 1901. The Act allows for the creation of Tariff Concession Orders (TCOs) to apply reduced customs duty rates on certain goods if no substitutable goods are produced in Australia in the ordinary course of business. This legislation is primarily concerned with the facilitation of trade by providing reduced tariffs under specific conditions, thus benefiting importers of the designated goods. The geographic and jurisdictional reach of this Act is national, as it is a Commonwealth instrument under the Customs Act 1901, which applies across Australia. There are no exclusions or exemptions specified in the Act for this particular TCO, though certain goods are inherently excluded from TCO consideration under section 269SJ. The Act allows for the extension or restriction of its application through subordinate instruments, ensuring flexibility in its implementation.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0807953 under the Customs Act 1901, focus on the process and criteria for granting Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S, 269SJ). A TCO allows for a lower rate of customs duty to be applied to specified goods. Specifically, section 269F enables a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO is satisfied that the application is valid and meets the core criteria, which include ensuring no substitutable goods were produced in Australia at the time of application (section 269C), the CEO must issue a TCO (section 269P(3)). Section 269K mandates that the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, although no submissions were received in this instance.
The Act imposes certain obligations on the parties involved. For instance, the CEO must ensure that the application for a TCO complies with the criteria outlined in section 269C and must publish a notice in the Gazette (section 269K). Additionally, the CEO must decide whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia at the time of the application (section 269P(3)). The applicant, in this case Queensland Rail Ltd, must provide sufficient information and evidence to support their application for a TCO. Moreover, the Act requires that any affected party who believes the TCO should not proceed must lodge a submission with the CEO within the specified timeframe.
There are specific consequences for non-compliance or breaches of the provisions set out in the Customs Act 1901. While the explanatory statement does not detail specific offences or penalties for failing to comply with the Act, it is generally understood that breaches of customs regulations can result in significant penalties. Under Australian law, penalties for breaches of customs legislation can include both civil and criminal sanctions. Civil penalties may involve financial penalties or the seizure of goods, while criminal penalties can include fines and imprisonment, depending on the severity of the offence. The exact penalties would be determined by the relevant courts, taking into account the specific circumstances and the nature of the breach.