EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909958
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 passenger train parts on 25 March 2009.
Instrument
TCO No 0909958 was made on 8 January 2010. It declares that those certain passenger train 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. 0909958 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 was enacted to provide for the regulation of customs and excise in Australia, including the imposition of customs duty on imported goods. The Act was introduced to address the need for a structured approach to the regulation and taxation of imported goods to protect domestic industries and generate revenue for the government. The Customs Act 1901 is administered by the Parliament of Australia, which enacts the necessary legislation and regulations to govern the customs and excise system. One of the key policy objectives of the Act is to provide mechanisms for tariff concessions, such as Tariff Concession Orders (TCOs), to support Australian industries by reducing the duty on certain imported goods under specific conditions. These concessions aim to foster fair competition and support the economic interests of Australian producers by ensuring that imported goods do not displace locally produced alternatives.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of Tariff Concession Orders (TCOs) to certain goods, effectively reducing the customs duty applied to those goods. This Act applies to any person or entity seeking to import goods into Australia, provided the goods in question are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The primary scope of this legislation is to encourage or facilitate trade by providing tariff concessions, thereby making certain imported goods more affordable. The TCOs are issued by the Chief Executive Officer of Customs upon satisfying specific core criteria, notably that no substitutable goods are produced in Australia. The geographic reach of this legislation is national, as it applies throughout Australia under the Commonwealth jurisdiction. However, it does not extend to goods listed in section 269SJ, which are inherently excluded from tariff concessions. Additionally, the Act allows for the creation of subordinate instruments that may further detail the application and implementation of TCOs, thereby extending or refining the scope of the primary legislation.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0909958, involve the process and criteria for making Tariff Concession Orders (TCOs). Section 269F outlines the procedure for applying for a TCO, whereby a person can apply to the Chief Executive Officer of Customs (CEO) for a concession. Section 269C specifies that the CEO must make a written order if the application meets the core criteria, which include that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (subsection 269P(3)). This instrument specifically declares that certain passenger train parts are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes specific obligations on the CEO when handling TCO applications. Under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this instance, no submissions were received. Additionally, the Act mandates that the TCO come into force on the date the application was lodged (subsection 269S(1)), which for this instrument was 25 March 2009. The Act also ensures that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken prior to the registration date.
In terms of penalties and consequences, the Act does not explicitly outline criminal or civil penalties for breaches of the TCO provisions. However, failure to comply with the conditions and requirements of the TCO, or any other provision of the Customs Act 1901, may result in various enforcement actions by the CEO, including but not limited to fines or other sanctions as prescribed under the relevant sections of the Act. The maximum penalties for breaches of customs regulations generally range depending on the nature and severity of the breach, but can include substantial fines and, in some cases, imprisonment for serious offences. The specific penalties for breaches related to TCOs would be determined based on the particular circumstances of the breach and the applicable laws.