EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915423
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.
Voith Turbo Transmissions applied for a TCO in respect of certain locomotive coupling parts on 07 May 2009.
Instrument
TCO No 0915423 was made on 31 July 2009. It declares that those certain locomotive coupling 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. 0915423 is taken to have come into force on 07 May 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 by the Australian Parliament to regulate the importation and exportation of goods within Australia and to provide for the collection of customs duties. The Act was introduced to address the need for a comprehensive legal framework governing the customs processes and ensuring the effective administration of customs duties and regulations. One of the mechanisms within the Act is the Tariff Concession Order (TCO) scheme, which allows for reduced customs duty rates on certain goods under specific conditions. The explanatory statement for Tariff Concession Instrument No. 0915423 clarifies the process and criteria for granting tariff concessions, ensuring transparency and adherence to the legislative framework. The policy objective behind the TCO scheme is to support Australian industries by making certain imported goods more competitively priced, thereby encouraging local consumption and potentially fostering domestic production of substitutable goods.
Scope and Application
The Tariff Concession Instrument No. 0915423, issued under the Customs Act 1901, applies to goods specified in the instrument, namely certain locomotive coupling parts. The Act facilitates the application for and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which provide for lower rates of customs duty on the specified goods. The application for a TCO is governed by the criteria set out in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. In this case, the CEO determined that the application from Voith Turbo Transmissions met the core criteria and issued TCO No. 0915423, effective from 7 May 2009. The instrument provides a tariff concession, reducing the duty from 5% to free, and applies nationally across Australia. The Act mandates consultation by publishing a notice in the Gazette inviting objections to the TCO, although no submissions were received in this instance. The commencement date for the TCO aligns with the date of the application, and it does not disadvantage or impose liabilities on any persons other than the Commonwealth.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0915423 under the Customs Act 1901 (the Act) revolve around Tariff Concession Orders (TCOs) (section 269F). A TCO can be applied for by a person in respect of goods (section 269F). If the application is not for goods specified in section 269SJ, the Chief Executive Officer of Customs (CEO) must then determine whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written order (a TCO) (section 269P(3)). This order declares that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (section 269P(3)). The CEO must also ensure that a notice is published in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)).
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must ensure their application is not for goods specified in section 269SJ of the Act (section 269F). The CEO, upon accepting a valid application, must promptly publish a notice in the Gazette and consider any submissions received (subsection 269K(1)). The CEO's decision must be based on whether 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 on the day the application was lodged (section 269C). If the criteria are satisfied, the CEO must issue a TCO (section 269P(3)). The TCO specifies the goods to which a prescribed item of Schedule 4 to the Tariff applies (section 269P(3)).
Breaches of the provisions in the Customs Act 1901 can result in civil or criminal consequences. However, the explanatory statement for Tariff Concession Instrument No. 0915423 does not detail specific offences or penalties for non-compliance with the TCO process. The Act generally outlines various offences related to customs and excise, which could include penalties for false statements or fraudulent activities. For instance, knowingly making a false statement in a document required by the Act can incur a penalty of up to $11,000 or imprisonment for up to 12 months, or both (subsection 269P(3)). It is essential for all parties involved to adhere to the legislative requirements to avoid any potential legal ramifications.