EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915554
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 heating and air conditioning roof mounted train on 08 May 2009.
Instrument
TCO No 0915554 was made on 31 July 2009. It declares that those certain heating and air conditioning roof mounted 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. 0915554 is taken to have come into force on 08 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 Tariff Concession Instrument No. 0915554, made under the Customs Act 1901, addresses the need for tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to implement lower rates of customs duty. Enacted in 2009, this instrument was designed to provide relief to importers by granting tariff concessions on certain heating and air conditioning roof-mounted train units, aligning with the policy objective of facilitating trade and economic efficiency. The instrument came into effect on 8 May 2009, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth. The process involved no submissions opposing the tariff concession, indicating broad acceptance of the measure's benefits.
Scope and Application
The Tariff Concession Instrument No. 0915554 under the Customs Act 1901 applies to specific goods—in this case, certain heating and air conditioning roof-mounted train units—that are the subject of a Tariff Concession Order (TCO) application. The application process is initiated by an entity, such as Downer Edi Rail Pty Ltd, which in this instance applied for the TCO on 8 May 2009. The Chief Executive Officer of Customs (CEO) evaluates the application to determine if it meets the core criteria stipulated in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business. Upon satisfaction of these criteria, the CEO issues a written order, or TCO, granting the concession. This specific TCO, made on 31 July 2009, declares that the mentioned goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%. The geographic reach of this legislation is national, as it applies throughout Australia. The application process involves public consultation, where interested parties can lodge submissions; however, in this instance, no submissions were received. The TCO does not retroactively disadvantage or impose liabilities on any person other than the Commonwealth, and it beneficially affects the rights of importers who can apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0915554, made under the Customs Act 1901, focus on the application and approval process for a Tariff Concession Order (TCO) (sections 269F, 269C, and 269P(3)). A TCO can be applied for by a person in respect of certain goods, as outlined in section 269F. The Chief Executive Officer of Customs (CEO) must then decide whether the application meets the core criteria, which are defined in section 269C as requiring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)). In this specific case, TCO No. 0915554 was made on 31 July 2009, declaring that certain heating and air conditioning roof mounted trains are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting them a tariff concession.
The Act imposes specific obligations and requirements on the parties involved in the TCO process. For instance, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). The CEO must also ensure that the application does not concern goods specified in section 269SJ of the Act, which cannot be subject to a TCO. Additionally, the CEO must verify that the application meets the core criteria, particularly ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Failure to adhere to these obligations could result in the TCO not being granted.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breach of the provisions related to TCOs. However, it is essential to note that 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, as they can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. Any failure to follow the prescribed procedures could potentially lead to legal challenges or disputes regarding the validity of the TCO.