EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909954
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.
Downer Edi Rail Pty Ltd applied for a TCO in respect of certain motors traction passenger train on 25 March 2009.
Instrument
TCO No 0909954 was made on 12 June 2009. It declares that those certain motors traction passenger train 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. 0909954 is taken to have come into force on 25 March 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, provides a framework for the administration of customs and excise, including provisions for Tariff Concession Orders (TCOs). The Act was introduced to address the need for a streamlined process to reduce customs duty on specific goods under certain conditions. TCOs were established to facilitate the import of goods that are not produced domestically or are not sufficiently produced to meet demand, thereby supporting industries by making imported goods more competitively priced. Instrument No. 0909954, made under the authority of the Act, was introduced to grant a tariff concession for certain motors used in traction passenger trains, effectively reducing the duty rate from the general 5% to free. This was done after determining that no substitutable goods were produced in Australia, meeting the core criteria set forth in the Act. The process involved an application by Downer Edi Rail Pty Ltd, followed by a decision by the Chief Executive Officer of Customs, with no objections received during the consultation period. The tariff concession is effective as of the date the application was lodged, providing a clear policy objective to support specific industries by reducing the financial burden of customs duties on essential imported goods.
Scope and Application
The Tariff Concession Instrument No. 0909954 under the Customs Act 1901 applies to goods for which a Tariff Concession Order (TCO) is sought and granted by the Chief Executive Officer of Customs. Specifically, this Instrument pertains to certain motors used in traction passenger trains, and it is relevant to any entities or individuals involved in the importation of these goods. The geographic scope of this Act is national, as it operates within the framework of Australian federal law. However, the application of the TCO is contingent upon the goods not being substitutable by any products manufactured within Australia, a criterion defined under sections 269D, 269E, and 269F of the Customs Act 1901. The Act ensures that no existing rights or liabilities of non-Commonwealth entities are adversely affected by the concession, and it explicitly states that no new liabilities are imposed by the order. Furthermore, while the Act provides for the possibility of subordinate instruments to extend or modify its application, this specific TCO does not reference any such extensions or restrictions in its explanatory statement.
Key Provisions
The Customs Act 1901, under Part XVA, outlines a process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). According to section 269F, an individual or entity may apply to the CEO for a TCO in relation to specific goods. Section 269C stipulates that for an application to meet the core criteria, it must be demonstrated that, on the day the application was lodged, no goods that could be substituted for the goods in question were produced in Australia in the ordinary course of business. This is further defined in section 269B, which explains the meaning of terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". If the CEO is satisfied that the application meets these criteria, they must issue a written order (section 269P(3)) declaring the goods subject to a prescribed tariff item, effectively reducing the customs duty rate.
The obligations imposed by the Act on the parties involved are significant. The CEO must review each TCO application to ensure it meets the core criteria outlined in section 269C. If the application is deemed valid, the CEO must not only issue a TCO but also publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections. This transparency ensures that all stakeholders have the opportunity to voice their concerns regarding the concession. In this instance, Downer Edi Rail Pty Ltd applied for a TCO on 25 March 2009, and the CEO subsequently issued TCO No. 0909954 on 12 June 2009, confirming that the motors traction passenger trains were subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
Failure to comply with the requirements set forth in the Customs Act 1901 can result in serious consequences. While the specific offences and penalties are not detailed in the explanatory statement, general provisions under the Act might include civil or criminal penalties for non-compliance. For instance, providing false information in a TCO application could lead to fines or legal action against the applicant. Additionally, any party found to be misusing a TCO could face penalties, such as the imposition of back duties or interest. The exact penalties would depend on the nature and severity of the breach, but they are intended to enforce compliance and maintain the integrity of the tariff concession scheme.