EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811332
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.
United Group Rail Services Ltd applied for a TCO in respect of certain locomotive parts on 04 June 2008.
Instrument
TCO No 0811332 was made on 03 October 2008. It declares that those certain locomotive parts 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. 0811332 is taken to have come into force on 04 June 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 was enacted by the Australian Parliament to regulate the customs duties and import regulations within Australia. The Act establishes a framework for the administration of customs and excise, including provisions for the imposition of tariffs and the granting of tariff concessions. In 2008, Tariff Concession Instrument No. 0811332 was introduced to address the specific issue of granting tariff concessions on certain goods that do not have substitutable Australian-made alternatives. This instrument aims to facilitate the importation of goods by providing a lower rate of customs duty, thereby encouraging trade and economic efficiency. The instrument was made under the authority of the Customs Act 1901, and its policy objective is to support industries by reducing the cost of importing specific goods, thus fostering competitive markets and potentially encouraging local production in the long term.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCO) through which the Chief Executive Officer of Customs can grant a lower rate of customs duty on certain goods. These orders apply to goods specified in an application, provided that the application meets the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. The scope of this Act is primarily concerned with the regulation of customs duties and the economic impact of importing certain goods into Australia. This legislation applies to entities or individuals seeking tariff concessions for imported goods, and its jurisdictional reach is national, as it is a Commonwealth Act. The Act does not specify exclusions or thresholds beyond those stipulated in section 269SJ, which outlines goods that cannot be subject to a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments, as evidenced by the creation of TCO No. 0811332 which specifies the application of a zero rate of duty on certain locomotive parts.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0811332, are sections 269C, 269P(3), and 269S(1) of the Customs Act 1901. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) application to be considered, which involves ensuring that no substitutable goods are produced in Australia. Section 269P(3) mandates that if these criteria are satisfied, the Chief Executive Officer of Customs (CEO) must issue a written TCO. Section 269S(1) specifies that the TCO is effective from the day the application was lodged. In this case, the TCO, issued on 3 October 2008, declared that certain locomotive parts are subject to a free rate of duty instead of the general rate of 5%.
The obligations and requirements imposed by this Act on the parties involved are primarily centred around the application and assessment process for a TCO. The CEO must ensure that the application meets the core criteria stipulated in section 269C. This includes verifying that no substitutable goods are produced in Australia on the day the application was lodged. If the CEO is satisfied with the application, they must issue a written TCO as per section 269P(3). Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made. In this instance, no submissions were received.
There are no explicit provisions in this legislation that outline offences, penalties, or consequences for breaches. However, the failure to comply with the requirements of the Customs Act 1901 could potentially lead to legal consequences under the broader customs laws. For example, if an entity fails to properly apply for or adhere to the terms of a TCO, it might face penalties under the Customs Act, which could include fines or other civil and criminal consequences. The specific penalties would depend on the nature and severity of the breach in accordance with the broader framework of the Customs Act 1901.