EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1007003
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 brake system check valves on 08 February 2010.
Instrument
TCO No 1007003 was made on 07 May 2010. It declares that those certain passenger train brake system check valves 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. 1007003 is taken to have come into force on 08 February 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, as supplemented by Tariff Concession Instrument No. 1007003 enacted in 2010, introduces a mechanism for the Chief Executive Officer of Customs to provide tariff concessions on specific goods, thereby addressing the issue of potential economic disadvantage for importers of these goods. This instrument was developed to facilitate lower rates of customs duty on goods not produced domestically, aligning with the policy objective of encouraging trade and investment by reducing the cost of importing certain products. The instrument was enacted by the Australian Parliament and operates under the framework set out in Part XVA of the Customs Act 1901, which allows for the application and consideration of tariff concession orders. The process involves an application by interested parties, a review by the CEO to ensure compliance with core criteria, and, if satisfied, the issuance of a tariff concession order. This legislative instrument ensures that the rights of importers are protected and may benefit from duty refunds, without imposing additional liabilities on any party.
Scope and Application
The Tariff Concession Order No. 1007003 under the Customs Act 1901 applies specifically to certain passenger train brake system check valves, as applied for by Downer Edi Rail Pty Ltd. This legislation operates within the framework of Part XVA of the Customs Act, which facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any entity or individual seeking tariff concessions for goods not produced in Australia and for which no suitable substitutes exist domestically. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia and its customs regulations. The application of the TCO is contingent upon satisfying the core criteria outlined in the Act, particularly ensuring that no substitutable goods are produced in Australia at the time the application is made. The TCO provides a tariff concession that reduces the duty on these specific goods from a general rate of 5% to free, provided the application meets the statutory requirements and no submissions are made against it. This order does not affect the rights of any person adversely nor impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main sections of Tariff Concession Instrument No. 1007003, as referenced in the Customs Act 1901, pertain to the establishment and application of Tariff Concession Orders (TCOs) for certain goods. Specifically, section 269C (2) of the Customs Act 1901 outlines the criteria that an application for a TCO must meet, primarily focusing on whether substitutable goods are produced in Australia. If the Chief Executive Officer (CEO) of Customs is satisfied that no such goods are produced in Australia on the day the application is lodged, they must then issue a TCO (section 269P(3)). This TCO declares the specified goods as being subject to a reduced or free rate of customs duty. For example, in this instance, the TCO No. 1007003 specifies that certain passenger train brake system check valves are subject to a free rate of duty, as opposed to the general rate of 5% (section 269P(3)).
Under the Customs Act 1901, the obligations imposed by the Act on the parties it governs include the requirement for any person seeking a TCO to ensure that their application meets the criteria set out in section 269C. This involves demonstrating that no substitutable goods are produced in Australia at the time the application is lodged. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the making of a TCO (subsection 269K(1)). The CEO must then consider any submissions received before making a decision. In this case, the CEO did not receive any submissions in response to the published notice. The Act also stipulates that a TCO comes into effect on the day the application is lodged (subsection 269S(1)).
In terms of potential consequences for breach of the Customs Act 1901, the Act does not explicitly outline specific offences or penalties for failing to comply with the provisions related to TCOs. However, any breaches of the broader customs regulations, including incorrect declarations or fraudulent activities, can lead to significant penalties. Under the Customs Act 1901, such penalties can include fines up to $11,100 for individuals and up to $55,500 for corporations, as well as potential imprisonment terms. The exact penalties may vary depending on the nature and severity of the breach, and are further governed by other relevant sections of the Act and associated regulations.