EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909971
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 bogie parts on 25 March 2009.
Instrument
TCO No 0909971 was made on 14 August 2009. It declares that those certain passenger train bogie 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. 0909971 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 Tariff Concession Instrument No. 0909971 was enacted in 2009 as part of the Customs Act 1901 to provide relief on customs duties for specific goods. This instrument was introduced to address a gap in the duty concession scheme by allowing for lower rates of customs duty on goods that meet certain criteria, particularly where no substitutable goods are produced in Australia. The instrument was established to streamline the process of applying for tariff concessions and to ensure that the application of tariff concessions is consistent with the objectives of the Customs Act 1901. The instrument was made by the Chief Executive Officer of Customs, who has the authority to decide on tariff concession applications under section 269F of the Act. The policy objective is to provide economic benefits by reducing the cost of importing specific goods, thus supporting businesses that rely on these imports.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person who may apply to the CEO for a TCO in respect of goods that are not specified in section 269SJ, which excludes certain goods from the scheme. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business, the CEO must make a written order declaring the specified goods as subject to a TCO. This instrument, TCO No. 0909971, was made in respect of certain passenger train bogie parts, reducing their customs duty rate from 5% to free. The application of the TCO is national, as it pertains to the general customs regime across Australia. The instrument does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person. The TCO came into force on the day the application was lodged, 25 March 2009, and the CEO published a notice in the Gazette inviting submissions, none of which were received.
Key Provisions
The Tariff Concession Instrument No. 0909971, as referenced in the Customs Act 1901, is a significant piece of legislation that allows for reduced customs duty rates on certain goods. Under Section 269F of the Act, a person can apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specified goods. If the CEO is satisfied that the application does not pertain to goods listed in Section 269SJ of the Act, which are ineligible for a TCO, the CEO must then determine whether the application meets the core criteria outlined in Section 269C. Specifically, the CEO must confirm that no substitutable goods were produced in Australia on the day the application was submitted. A TCO is only granted if the application adheres to these criteria, as specified in Section 269P(3).
The obligations imposed by this Act primarily concern the process and criteria for applying and granting TCOs. The CEO has the responsibility to assess each application against the specified criteria, ensuring that no substitutable goods were produced in Australia on the application date. Furthermore, Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons against the making of a TCO. This ensures transparency and provides an opportunity for public consultation. In the case of TCO No. 0909971, Downer EDI Rail Pty Ltd applied for a concession on certain passenger train bogie parts, and the CEO made the order on 14 August 2009, after verifying that no substitutable goods were produced in Australia.
Breaching the requirements of the Customs Act 1901 can result in significant legal consequences. The Act does not explicitly state offences or penalties for non-compliance with the TCO provisions, but general provisions under the Act could apply. For instance, making a false statement or providing misleading information in an application could result in criminal charges under Section 266 of the Act, with penalties including fines and imprisonment. Additionally, any misuse of the TCO benefits could lead to civil penalties or the revocation of the TCO. The maximum penalties for such offences can vary, but they are generally substantial, reflecting the seriousness of non-compliance with customs regulations.