EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008012
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 applied for a TCO in respect of certain passenger train brake system valves on 15 February 2010.
Instrument
TCO No 1008012 was made on 14 May 2010. It declares that those certain passenger train brake system 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. 1008012 is taken to have come into force on 15 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 Tariff Concession Instrument No. 1008012, enacted under the Customs Act 1901, was introduced to address the need for a streamlined process in granting tariff concessions for specific goods, particularly in cases where no substitutable domestic goods are produced. This legislative instrument, issued by the Chief Executive Officer of Customs, aims to facilitate the reduction of customs duty rates for certain imported goods, thereby encouraging trade and potentially lowering costs for businesses and consumers. The Act’s underlying policy objective is to support economic growth by easing the financial burden of customs duties on specific imported goods, provided that these goods are not replaceable by Australian-produced alternatives. The instrument was created following an application by Downer EDI Rail for tariff concessions on certain passenger train brake system valves, leading to the concession being granted after it was determined that no equivalent goods were being produced in Australia.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1008012, applies to the concession of customs duties on specified goods, allowing for the application of a lower rate of duty for certain imported goods. Specifically, this instrument pertains to certain passenger train brake system valves which, as of the instrument's effective date, are exempt from the standard 5% duty rate and instead are subject to a free rate of duty. The instrument applies to Downer Edi Rail, the entity that applied for the tariff concession, and to importers of the specified goods who may benefit from this concession. The geographic reach of the Act is national, as it operates under the Australian Commonwealth jurisdiction. Any person or entity importing these specific goods into Australia is subject to the provisions of this Act and the tariff concession granted by the instrument. There are no exclusions or exemptions stated within this particular instrument, but the core criteria outlined in section 269C of the Act must be satisfied for a tariff concession to be applied. The Act also provides for subordinate instruments to extend or restrict the application of the tariff concession, though no such instruments are referenced in this context.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1008012 under the Customs Act 1901 (section 269P(3)) establish a lower rate of customs duty on certain passenger train brake system valves, as specified in the instrument. This lower rate is applied because the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged (section 269C). This instrument, TCO No. 1008012, was made on 14 May 2010, and it effectively declares that the passenger train brake system valves in question are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, instead of the general rate of 5%.
The obligations imposed by this Act on the parties it governs include the requirement for an applicant, such as Downer Edi Rail, to ensure that their application for a Tariff Concession Order (TCO) meets the core criteria set out in section 269C. This involves proving that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must then decide whether to make a written order (a TCO) if the application meets these criteria. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid one, inviting any interested party to submit reasons why the TCO should not be made (subsection 269K(1)).
Any breach of the provisions outlined in this legislation could potentially lead to civil or criminal consequences, although specific penalties are not detailed in the provided text. Generally, under Australian law, failure to comply with customs regulations can result in fines or other penalties, depending on the severity of the breach. However, this particular instrument does not specify maximum penalties for non-compliance, so it would be necessary to refer to broader customs legislation for details on potential sanctions.
Overall, the Tariff Concession Instrument No. 1008012 streamlines the customs process for certain passenger train brake system valves by reducing the duty rate to zero, provided the criteria for a TCO are met. The CEO's role is crucial in ensuring that these criteria are appropriately assessed and applied, while the Act provides a structured process for applications and public consultation.