EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0819864
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 applied for a TCO in respect of certain locomotive traction pins on 17 July 2008.
Instrument
TCO No 0819864 was made on 10 October 2008. It declares that those certain locomotive traction pins 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. 0819864 is taken to have come into force on 17 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the application and administration of tariffs, including the provision for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument was designed to address the need for tariff reductions on specific goods, facilitating trade and economic benefits by lowering customs duties for certain imported goods. Tariff Concession Instrument No. 0819864, introduced in 2008, is a specific application of this framework, providing tariff concessions on locomotive traction pins. The instrument was made in response to an application by United Group Rail Services, and after satisfying the core criteria outlined in the Act, the Chief Executive Officer of Customs declared that the specified locomotive traction pins are subject to a concession, effectively setting their duty rate at free, down from the general rate of 5%. This legislative measure ensures that the rights of importers are positively impacted, allowing them to seek refunds on duties paid on these goods since the date the TCO was taken to have come into force, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0819864, established under the Customs Act 1901, applies to goods specified in the instrument, particularly locomotive traction pins, for which a Tariff Concession Order (TCO) has been granted by the Chief Executive Officer of Customs. This instrument provides for a reduced customs duty rate for these specified goods, from the general rate of 5% to a duty-free status, effective from the date the application for the TCO was lodged. The instrument ensures that the rights of importers are positively affected, allowing them to apply for refunds of duty on goods imported since the effective date of the TCO. Importantly, the TCO does not disadvantage any person or impose new liabilities on anyone in respect of actions taken before the TCO was registered. The Act applies to all entities and persons involved in the importation of these specified goods within Australia, ensuring compliance with the concessionary tariff provisions. The instrument operates on a national level, governed by the Commonwealth, and extends its reach to all states and territories within Australia. However, the Act excludes goods specified in section 269SJ of the Customs Act 1901 from being subject to a TCO. The application of this instrument can be further refined or expanded through subordinate instruments, allowing for adjustments to the scope and application of the TCO as necessary.
Key Provisions
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply lower customs duties on specified goods, as outlined in sections 269F, 269C, 269B, and 269P(3). For instance, TCO No. 0819864 was made on 10 October 2008 for certain locomotive traction pins, reducing the duty from 5% to free. This decision was based on the CEO's satisfaction that no substitutable goods were produced in Australia, as defined under sections 269D and 269E.
The obligations under the Act require that the CEO must consider an application for a TCO and determine if it meets the core criteria. This involves ensuring that the goods in question are not prohibited from TCOs under section 269SJ and that no substitutable goods are produced in Australia as per section 269C. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as stipulated in subsection 269K(1). In the case of TCO No. 0819864, no submissions were received in response to this invitation.
Failing to comply with the requirements of the Customs Act 1901 can result in legal consequences. The Act does not explicitly outline specific offences or penalties for breaches related to TCOs; however, general breaches of the Customs Act can lead to civil or criminal penalties. These can include fines and imprisonment, depending on the nature and severity of the breach. It is important for entities and individuals governed by the Act to adhere to the stipulated procedures to avoid any adverse consequences.