EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900751
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 applied for a TCO in respect of certain passenger trains gangways on 12 January 2009.
Instrument
TCO No 0900751 was made on 03 April 2009. It declares that those certain passenger trains gangways 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. 0900751 is taken to have come into force on 12 January 2009.
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 within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on specific goods, facilitating trade by reducing the financial burden on importers. The problem or gap this Act addresses is the need for a mechanism to provide tariff relief on certain goods, enhancing the competitiveness of Australian businesses in the global market. The policy objective, as stated in the explanatory statement, is to ensure that goods for which no substitutable Australian-made alternatives exist are eligible for tariff concessions, thereby supporting economic growth and trade efficiency.
On 3 April 2009, TCO No. 0900751 was issued, granting tariff concessions on certain passenger trains gangways, reducing the duty rate from 5% to free. This concession was granted after Bombardier Transportation applied for the order on 12 January 2009, and the CEO confirmed that no substitutable goods were produced in Australia. The order came into effect on the date of application, 12 January 2009, and does not affect the rights of any person adversely or impose any new liabilities. Importers can benefit by applying for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty for specified goods. The Act applies to any individual or entity that seeks to import goods that are eligible for tariff concessions, provided that the goods do not fall under the prohibitions set out in section 269SJ of the Act. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, which is determined by the criteria in sections 269C, 269D, and 269E of the Act. The CEO is mandated to make a written TCO if the application meets these criteria. The TCO No. 0900751, made on 3 April 2009, pertains to certain passenger trains gangways, reducing their duty rate from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The order came into effect on 12 January 2009, the date the application was lodged, and it does not affect existing rights or impose new liabilities on any person other than the Commonwealth. The rights of importers are positively impacted, allowing them to apply for duty refunds on eligible goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). These orders apply a lower rate of customs duty to specified goods. An application for a TCO can be made by any person, provided the goods in question are not excluded by section 269SJ. The CEO must assess whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). Definitions for terms like "goods produced in Australia" and "ordinary course of business" are provided in sections 269D and 269E respectively, and "substitutable goods" is defined in section 269B. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (section 269P(3)).
Entities and individuals involved with the goods subject to a TCO have specific obligations under the Act. The CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of the TCO (subsection 269K(1)). If no submissions are received, the CEO proceeds to issue the TCO. Importers of the affected goods have the right to apply for a refund of duty on imports made since the date the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This ensures that the benefits of the TCO are passed on to the importers.
The Act and associated regulations do not impose any liabilities on any person for actions taken before the TCO is registered. However, there are potential civil and criminal consequences for breaches of the Act. The specific penalties for breaches are not detailed in the explanatory statement, but under the Customs Act 1901, breaches can result in substantial fines and, in some cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant case law or subsequent legislative amendments. It is important for all parties to comply with the requirements of the Act to avoid these potential consequences.