EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1003380
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 bogie passenger train gearboxes on 19 January 2010.
Instrument
TCO No 1003380 was made on 09 April 2010. It declares that those certain bogie passenger train gearboxes 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. 1003380 is taken to have come into force on 19 January 2010.
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 Australian Parliament, establishes a framework for the regulation of customs and excise duties, including the mechanism for Tariff Concession Orders (TCOs). The Act was introduced to address the need for a streamlined process to grant tariff concessions on specific goods, ensuring that Australian businesses and consumers can benefit from reduced customs duties where appropriate. The explanatory statement for Tariff Concession Instrument No. 1003380 indicates that the Chief Executive Officer of Customs has the authority to make TCOs when certain conditions are met, specifically when no substitutable goods are produced in Australia. In this instance, Downer Edi Rail Pty Ltd applied for a TCO for certain bogie passenger train gearboxes, and the CEO was satisfied that the application met the necessary criteria, resulting in the issuance of Instrument TCO No. 1003380 on 09 April 2010. This instrument declares that the specified goods are subject to a zero rate of duty under the Customs Tariff Act 1995, effective from 19 January 2010, the date the application was lodged.
Scope and Application
The Customs Act 1901, under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which an application has been made, provided the application meets the core criteria outlined in the Act. The application process allows individuals or entities to request a lower rate of customs duty on goods not specified in section 269SJ of the Act, which includes goods that cannot be subject to a TCO. For instance, Downer Edi Rail Pty Ltd successfully applied for a TCO on certain bogie passenger train gearboxes, which were granted a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. This particular TCO came into effect on the date the application was lodged, 19 January 2010, and does not affect any pre-existing rights or liabilities of individuals or entities other than the Commonwealth. The TCO also includes provisions for importers to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework for Tariff Concession Orders (TCOs) as detailed in Part XVA. Under section 269F, a person can apply to the Chief Executive Officer of Customs (the CEO) for a TCO concerning specific goods. If the CEO determines that the application is valid and not in respect of goods specified in section 269SJ, they must then assess whether the application meets the core criteria set out in section 269C. The core criteria require that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to make a written order, a TCO, if satisfied that the application meets the core criteria. This is stipulated under section 269P(3) of the Act, which mandates that a TCO must declare the goods in question as subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). In the case of Downer Edi Rail Pty Ltd's application for a TCO regarding certain bogie passenger train gearboxes, the CEO concluded that no substitutable goods were produced in Australia, thus satisfying the core criteria. Consequently, TCO No. 1003380 was issued on 09 April 2010, applying item 50 of Schedule 4 to the Tariff to these goods, resulting in a free rate of duty instead of the general rate of 5%.
Regarding compliance and enforcement, the Act stipulates specific obligations. Under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions in response to this invitation. Additionally, the Act under subsection 269S(1) 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. This means that TCO No. 1003380 is deemed to have come into effect on 19 January 2010, the date the application was lodged. It is important to note that the TCO does not affect the rights of a person other than the Commonwealth as at the date of registration, ensuring no person is disadvantaged or imposed liabilities regarding actions before the registration date.
There are no explicit offences, penalties, or civil/criminal consequences for breach detailed in the explanatory statement provided. However, any non-compliance with the conditions set out in the TCO or any failure to adhere to the provisions of the Customs Act 1901 and related regulations could potentially lead to legal repercussions, including fines or other penalties as prescribed under the general provisions of the Customs Act and relevant regulations.