EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0841109
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 electronic control air brake parts on 25 November 2008.
Instrument
TCO No 0841109 was made on 27 February 2009. It declares that those certain locomotive electronic control air brake 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. 0841109 is taken to have come into force on 25 November 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. 0841109 was enacted in 2009 under the Customs Act 1901 to address the need for tariff concessions on specific goods that were not being produced in Australia in the ordinary course of business. This legislation was introduced to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions, thereby reducing the duty on specified goods, in this case, certain locomotive electronic control air brake parts. The enacting body responsible for this legislation is the Australian Parliament, and the policy objective is to facilitate the import of goods that are not domestically produced, thus supporting industries that rely on imported components without imposing undue burdens on businesses or consumers.
This instrument was made in response to an application by United Group Rail Services for a tariff concession on certain locomotive electronic control air brake parts, which was approved as no substitutable goods were being produced in Australia. The instrument provides a zero duty rate for these parts, effective from the date of the application, 25 November 2008. The instrument also ensures that the rights of importers are preserved and can benefit from duty refunds for imports made since the effective date. The process involved publishing a notice in the Gazette inviting submissions from interested parties, none of which were received.
Scope and Application
The Tariff Concession Instrument No. 0841109 applies to certain locomotive electronic control air brake parts and is made under Part XVA of the Customs Act 1901, which facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any entity that imports the specified goods, granting them a concession on customs duty rates as stipulated by the instrument. The instrument was initiated by a valid application made by United Group Rail Services on 25 November 2008, and it came into effect on the same date. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth and provides benefits to importers who may apply for a refund of duty on goods imported since the TCO's effective date. The scope of the Act extends across the Commonwealth of Australia, and the instrument does not include any specific exclusions other than those outlined in section 269SJ of the Customs Act 1901, which specifies goods that cannot be subject to a TCO. The instrument itself does not introduce any new exclusions or exemptions beyond what is already provided for in the primary Act.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0841109, are sections 269C, 269P, and 269SJ of the Customs Act 1901. Section 269C outlines the core criteria that must be satisfied for a Tariff Concession Order (TCO) application to be considered valid, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged (s269C). If the Chief Executive Officer (CEO) of Customs is satisfied with the application, they must issue a TCO as per section 269P(3) (s269P). This TCO will specify that the goods in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, effectively applying a lower rate of customs duty or, in this case, making the duty free (s269P(3)).
The Act imposes specific obligations and requirements on both the applicants and the CEO of Customs. Applicants must ensure their applications are made in accordance with section 269F and are not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO (s269F, s269SJ). The CEO is required to assess applications against the core criteria in section 269C and, if satisfied, to make a written TCO as per section 269P(3) (s269C, s269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this case, no submissions were received (s269K(1)).
The legislation also specifies the consequences for non-compliance or breaches. While the explanatory statement does not detail specific offences or penalties under the Customs Act 1901, it is understood that failure to comply with the requirements of the Act, including the proper submission and assessment of TCO applications, could lead to civil or criminal consequences. The maximum penalties for breaches of the Customs Act 1901 can be severe, potentially including fines and imprisonment, depending on the nature and severity of the offence. The specifics of penalties would be found in the relevant sections of the Act and associated regulations, which are not detailed in the explanatory statement provided.