EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915570
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 circuit breakers roof mounted train on 08 May 2009.
Instrument
TCO No 0915570 was made on 31 July 2009. It declares that those certain circuit breakers 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. 0915570 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 Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) that reduce customs duty on specific goods, provided certain criteria are met. Enacted by the Parliament of Australia, this legislative framework was introduced to address the need for a streamlined process to grant tariff concessions to businesses, particularly those importing goods that are not produced domestically. The policy objective is to support Australian industries by lowering the cost of imported goods, thereby encouraging fair competition and economic growth. Pursuant to this Act, the Chief Executive Officer of Customs is authorised to make these orders following applications from interested parties, subject to satisfying the core criteria outlined in the Act, such as the non-existence of substitutable goods produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 0915570 clarifies the application and approval process for specific goods, such as certain circuit breakers for roof-mounted trains, ensuring the legislative intent to reduce duty rates and benefit importers is achieved.
Scope and Application
The Tariff Concession Instrument No. 0915570 applies to certain circuit breakers roof mounted train, as specified in the instrument, and it is administered under the Customs Act 1901. This Act pertains to the regulation of customs duties and allows for the application of tariff concessions to specific goods through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. The legislation applies to entities and individuals involved in the importation of these goods, particularly benefiting importers who can seek refunds of duties under certain conditions. The instrument has a national jurisdictional reach as it is a Commonwealth Act. However, it excludes goods specified in section 269SJ of the Act, which are ineligible for TCOs. The application of this Act can be extended or restricted through subordinate instruments, though in this instance, no such extensions or restrictions are noted. The TCO in question came into effect on the date the application was lodged, 08 May 2009, and does not affect any pre-existing rights or liabilities of individuals or entities except for the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0915570 pertain to the process by which a Tariff Concession Order (TCO) can be made under the Customs Act 1901 (the Act) and the effect such an order has on the applicable customs duty. Specifically, section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria as outlined in sections 269C and 269P of the Act, they must make a written order (the TCO) declaring that the goods in question are subject to a prescribed rate of customs duty as specified in Schedule 4 to the Customs Tariff Act 1995. In this case, the TCO No. 0915570 was made on 31 July 2009, declaring that certain circuit breakers roof mounted train are subject to a rate of duty of free, as opposed to the general rate of 5%.
The Act imposes certain obligations and requirements on the parties involved. The CEO must ensure that any TCO application is assessed against the criteria in section 269C of the Act, specifically determining whether no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as required by section 269K(1) of the Act. In this instance, no submissions were received in response to the notice.
The Act also outlines the consequences for non-compliance with the terms of a TCO. While the Explanatory Statement does not detail specific offences or penalties for breaching the conditions of a TCO, it is implicit that failure to adhere to the terms of the TCO could result in the goods being subject to the higher rate of duty applicable under the Customs Tariff Act 1995. Furthermore, any person found to be circumventing the provisions of the TCO may face legal action under the Customs Act 1901, which could include fines and other penalties as prescribed by law. The rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person other than the Commonwealth.