EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909969
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 0909969 was made on 14 August 2009. 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. 0909969 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 Parliament of Australia, establishes a framework for the imposition of customs duties on imported goods. This Act was introduced to facilitate international trade by providing a systematic approach to the collection of customs duties and the regulation of imported goods. One of the mechanisms within this Act is the Tariff Concession Orders (TCOs), which are designed to provide tariff relief on certain imported goods under specific conditions. Specifically, TCOs allow for a lower rate of customs duty on goods for which no substitutable goods are produced in Australia. The objective of this mechanism is to support industries by reducing the cost of imported goods that are essential for their operations, thus fostering competitiveness without unduly burdening importers with excessive duties. The Tariff Concession Instrument No. 0909969 is an example of this process, where the CEO of Customs granted a concession to Downer EDI Rail Pty Ltd for certain passenger train parts, effectively reducing the duty from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0909969 under the Customs Act 1901 applies to the specific instance of certain passenger train parts applied for by Downer EDI Rail Pty Ltd, and pertains to the application of a lower rate of customs duty on these goods. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) if certain criteria are met, specifically if no substitutable goods are produced in Australia. This instrument affects the importation of these particular goods by reducing the customs duty from the general rate of 5% to free, as long as the conditions set out in the Act are satisfied. The scope of the Act is limited to the specific goods mentioned in the TCO and does not extend to other goods or industries unless they meet the same criteria for a TCO application. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the application of customs duties. The legislation does not explicitly exclude or exempt any particular entities or conduct, but it does limit the application to goods that are not specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The Act may be extended or restricted through subordinate instruments, such as regulations, but this particular TCO does not impose any liabilities or disadvantage any person other than the Commonwealth.
Key Provisions
The main sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for the application of a TCO by a person seeking lower customs duty on specific goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application is valid and meets the core criteria set out in section 269C, they are required to make a TCO. This is detailed in section 269P(3), which mandates the CEO to issue a written order declaring the goods subject to the TCO application and specifying the prescribed tariff item that applies.
The obligations under the Act for the CEO include reviewing the application to ensure it is valid and does not pertain to goods listed in section 269SJ. The CEO must also ensure that, as per section 269K(1), a notice is published in the Gazette inviting submissions from any interested parties. If no submissions are received, the CEO proceeds to make the TCO. Additionally, under section 269S(1), the TCO is deemed to have come into force on the date the application was lodged.
Breach of the provisions under this legislation does not typically incur criminal penalties, but non-compliance with the terms of the TCO could result in civil consequences such as financial penalties or the requirement to pay the full customs duty on the goods in question. While the explanatory statement does not specify maximum penalties, it is understood that the seriousness of the breach would determine the extent of any financial repercussions. The rights of importers are protected, and they can apply for a refund of duty paid on goods imported since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations.