EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828507
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.
Voith Turbo Transmisson Pty Ltd applied for a TCO in respect of certain locomotive transmissions and gearbox on 28 August 2008.
Instrument
TCO No 0828507 was made on 14 November 2008. It declares that those certain locomotive transmissions and gearbox 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. 0828507 is taken to have come into force on 28 August 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, establishes a framework for managing customs duties, including the ability to grant tariff concessions for specific goods through Tariff Concession Orders (TCOs). This legislative instrument was introduced to address the need for flexibility in customs duty rates to support industries and economic activities by reducing costs for certain imported goods. The explanatory statement for Tariff Concession Instrument No. 0828507 highlights that the Customs (Tariff Concession) Order 2008 (TCO No. 0828507) was made on 14 November 2008, following an application by Voith Turbo Transmission Pty Ltd for tariff concessions on certain locomotive transmissions and gearboxes. The policy objective was to provide tariff relief by applying a zero rate of duty on these goods, effective from the date the application was lodged, provided that no substitutable goods were produced in Australia. The CEO was satisfied with the application and no objections were received during the consultation period, thus facilitating the tariff concession without imposing any new liabilities or disadvantaging any existing rights holders.
Scope and Application
The Tariff Concession Instrument No. 0828507 under the Customs Act 1901 applies to certain locomotive transmissions and gearboxes, allowing for a lower rate of customs duty for these goods. Specifically, the instrument was enacted to provide tariff concessions to Voith Turbo Transmission Pty Ltd for the specified goods, where the normal duty would otherwise be 5%. The application of this instrument is contingent upon the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia, meaning that no goods produced domestically could serve the same purpose as the imported items. The instrument's geographic and jurisdictional reach is limited to the Commonwealth of Australia, as it operates under the federal Customs Act 1901. This concession does not extend to any goods specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities other than the Commonwealth. Any subordinate instruments or regulations that may extend or restrict the application of this Act are to be found within the Customs Regulations 1994 and related instruments.
Key Provisions
The main provisions of the Tariff Concession Instrument No. 0828507, as referenced in the Customs Act 1901 (section 269P(3)), concern the establishment of a Tariff Concession Order (TCO) for specific goods, in this case certain locomotive transmissions and gearboxes. The instrument was issued on 14 November 2008 and specifies that the goods in question are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%. This order was made following an application by Voith Turbo Transmission Pty Ltd on 28 August 2008, and it is effective as of the date of the application, 28 August 2008 (section 269S(1)).
The Customs Act 1901 imposes several obligations on the parties involved in the process of applying for and receiving a TCO. Firstly, section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. The CEO must then determine whether the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must also ensure that the goods are not those specified in section 269SJ, which lists goods that cannot be subject to a TCO. Furthermore, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1) to invite any interested parties to submit objections or reasons why the TCO should not be made.
Failure to comply with the requirements of the Customs Act 1901 can lead to various consequences. While the explanatory statement does not explicitly detail criminal or civil penalties for non-compliance with TCO provisions, breaches of related customs regulations may attract penalties as outlined in other sections of the Act or associated regulations. For instance, knowingly making a false statement or providing misleading information in a TCO application could lead to prosecution under the general false statement provisions, which could result in fines and imprisonment. Additionally, any attempt to evade duty or otherwise circumvent the terms of a TCO could result in civil penalties, including financial penalties and recovery of unpaid duties, as well as potential criminal charges under relevant sections of the Customs Act 1901.