EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906969
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.
Faiveley Transport Australia applied for a TCO in respect of certain railway rolling stock brake pads on 27 February 2009.
Instrument
TCO No 0906969 was made on 22 May 2009. It declares that those certain railway rolling stock 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. 0906969 is taken to have come into force on 27 February 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, governs the regulation of customs and border control. To address the need for tariff concessions that encourage the importation of goods not produced domestically, Part XVA of the Act allows for Tariff Concession Orders (TCOs). These orders provide for a lower rate of customs duty on specific goods. Faiveley Transport Australia applied for a TCO for certain railway rolling stock brake pads, which led to the creation of TCO No. 0906969 on 22 May 2009. The Tariff Concession Instrument reduced the duty on these goods from 5% to free, effective from 27 February 2009. This measure aimed to facilitate the importation of these non-domestically produced goods without imposing any disadvantage or liabilities on parties prior to the TCO's registration.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs to reduce the customs duty on certain goods. This concession applies to goods that are subject to a TCO, provided that the application meets the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The application process involves an assessment of whether the goods in question can be substituted by locally produced goods, which are defined by specific statutory terms. The TCO No. 0906969, made on 22 May 2009, applies to certain railway rolling stock brake pads and reduces the duty rate from 5% to free, reflecting the absence of Australian production of substitutable goods. The TCO applies nationally and affects the rights of importers by allowing them to seek refunds on duties paid on imports since the effective date of the order, which is the date the application was lodged. This legislative instrument does not disadvantage or impose liabilities on any person, including the Commonwealth, in respect of actions taken before the TCO was registered.
Key Provisions
The primary operative sections of this legislation, found in Part XVA of the Customs Act 1901, concern the creation and effects of Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, as outlined 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. If the CEO is satisfied that the application meets these criteria, a written order, or TCO, is made under section 269P(3), specifying the goods and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to them. This effectively reduces or eliminates customs duty on the specified goods.
The obligations and requirements imposed by the Act on the parties involved include the duty of Faiveley Transport Australia to ensure their application for a TCO complies with the core criteria set out in section 269C. This involves demonstrating that no substitutable goods were produced in Australia at the time of the application. The CEO of Customs must then assess this application against these criteria. Upon satisfying themselves that the application meets the core criteria, the CEO is required to make a TCO under section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. In this case, no submissions were received, allowing the TCO to proceed.
Any breaches of the requirements or obligations set out in the Customs Act 1901 may lead to civil or criminal consequences, depending on the nature and severity of the breach. The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, general provisions in the Customs Act 1901 and the Customs Regulations 1993 could apply, which may include penalties for non-compliance, such as fines or imprisonment. The maximum penalties for breaches of customs legislation can vary significantly, generally depending on the seriousness of the offence, but may include substantial fines and imprisonment terms for more severe violations.