EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009228
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 parts on 22 February 2010.
Instrument
TCO No 1009228 was made on 14 May 2010. It declares that those certain passenger train brake system parts 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. 1009228 is taken to have come into force on 22 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, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and the importation and exportation of goods. One of the key features of this Act is the provision for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs to provide lower rates of customs duty on certain goods. This legislative instrument was introduced to address the need for flexible tariff arrangements that could cater to specific economic circumstances, such as when no substitutable goods are produced domestically. In line with this objective, the Act allows for tariff concessions where there is a demonstrated absence of local production of goods that could serve as a substitute for the imported items. The explanatory statement for Tariff Concession Instrument No. 1009228 outlines the process and criteria for such concessions, including the requirement for the CEO to be satisfied that no substitutable goods are produced in Australia, and the subsequent publication of the decision in the Gazette to allow for any objections. This instrument, which came into effect on the date the application was lodged, ensures that the rights of importers are protected and that no existing liabilities are imposed on any party.
Scope and Application
The Tariff Concession Instrument No. 1009228 under the Customs Act 1901 applies to certain passenger train brake system parts for which Downer Edi Rail applied for a Tariff Concession Order (TCO). The Act allows for the concession of customs duty on specified goods when the Chief Executive Officer of Customs (CEO) determines that no substitutable goods are produced in Australia in the ordinary course of business. The CEO must assess whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia. If satisfied, the CEO issues a TCO, which in this case, declares that the specified goods are subject to a duty-free rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty from 5% to free. The TCO applies to the goods from the date the application was lodged, 22 February 2010, and does not affect any existing rights or impose liabilities on anyone other than the Commonwealth. The instrument does not exclude any specific entities or industries but rather assesses applications on a case-by-case basis for the eligibility of tariff concessions.
Key Provisions
The primary operative sections of this legislation concern Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). These sections allow for applications to the Chief Executive Officer of Customs (CEO) for tariff concessions on certain goods. If the application is deemed valid, a TCO is issued, specifying the goods eligible for the concession and the applicable duty rate (section 269P(3)). For instance, in TCO No. 1009228, certain passenger train brake system parts were granted a duty rate of free, whereas the general rate is 5% (section 269S(1)).
The Act imposes certain obligations on both the CEO and the applicants for TCOs. The CEO is required to assess whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any objections to the TCO application, allowing for public consultation (subsection 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date (subsection 269S(2)).
The legislation provides for potential consequences and penalties for non-compliance. While specific penalties are not detailed in the explanatory statement, breaches of the Customs Act 1901 can generally result in civil or criminal penalties. These may include fines and imprisonment, depending on the severity and nature of the breach. The exact penalties would be determined according to the specific provisions of the Customs Act 1901 and related regulations.
In summary, the legislation facilitates the process for applying for and issuing TCOs, ensuring that the rights and obligations of all parties are clearly defined and communicated. The CEO’s role in assessing applications and publishing notices is crucial in maintaining the integrity and fairness of the tariff concession scheme.