EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816782
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.
Bombardier Transportation Pty Ltd applied for a TCO in respect of certain locomotive brake pads on 09 July 2008.
Instrument
TCO No 0816782 was made on 03 October 2008. It declares that those certain locomotive brake pads 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. 0816782 is taken to have come into force on 09 July 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. 0816782, introduced under the Customs Act 1901, was enacted in 2008 to address the specific issue of providing tariff concessions on certain imported goods, in this case locomotive brake pads, to Bombardier Transportation Pty Ltd. The instrument was created to facilitate a more competitive market by reducing the duty on these goods from 5% to free, provided that no substitutable goods were being produced in Australia at the time of the application. This legislative action was taken by the Chief Executive Officer of Customs, in accordance with the provisions outlined in Part XVA of the Act. The underlying policy objective is to support Australian industries by ensuring that tariff concessions are granted only when there is no domestic production of substitutable goods, thereby protecting local businesses and fostering a fair trading environment.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking a concession on customs duties for specific goods, provided these goods are not listed in section 269SJ of the Act, which excludes certain goods from eligibility for a TCO. For a TCO to be granted, the application must meet the core criteria as outlined in sections 269C, 269D, and 269E of the Act, ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. This legislation operates on a Commonwealth level, and its application can be extended or refined through subordinate instruments, such as the Customs Tariff Act 1995. The geographic reach of this Act is effectively national, as it pertains to customs duties applicable across Australia. Notably, the Act does not disadvantage any person by affecting their rights as at the date of registration and does not impose liabilities on any person regarding actions taken before the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0816782, under the Customs Act 1901, pertain to the process and criteria for applying for and granting Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. The CEO is then required to assess whether the application meets the core criteria outlined in section 269C, which stipulates that a TCO application can be approved if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO must issue a written TCO, as outlined in section 269P(3). In this instance, TCO No. 0816782 applies to certain locomotive brake pads, which are now subject to a free rate of duty, as opposed to the general rate of 5%.
The obligations imposed by the Act on parties applying for a TCO, as well as on the CEO, are primarily procedural and conditional. For applicants, the primary obligation is to ensure that their application is made in accordance with section 269F and that it details why the goods in question should qualify for a TCO. The CEO must then, under section 269K(1), publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted. The CEO's role includes verifying the core criteria set out in section 269C, and if met, issuing the TCO as mandated by section 269P(3). The CEO also has the duty to not impose any new liabilities on persons other than the Commonwealth and to ensure that the rights of existing parties are not adversely affected by the TCO, as stipulated in subsection 269S(1).
In terms of offences, penalties, or consequences for breaches, the Customs Act 1901 does not explicitly state penalties for non-compliance with the TCO provisions within the Explanatory Statement provided. However, general provisions within the Act likely impose penalties for any breaches related to customs duties, including potential fines or imprisonment for serious or repeated violations. The specific penalties would be determined by the relevant sections of the Act and any associated regulations, which are not detailed in the provided text. The focus here is more on the procedural correctness and the conditional nature of granting TCOs rather than on punitive measures for non-compliance.