EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023360
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.
Vossloh Cogifer Aust Pty Ltd applied for a TCO in respect of certain swingnose crossings on 25 May 2010.
Instrument
TCO No 1023360 was made on 17 August 2010. It declares that those certain swingnose crossings 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. 1023360 is taken to have come into force on 25 May 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. 1023360, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods, facilitating more affordable importation and potentially encouraging local industries that may not otherwise produce these goods domestically. The instrument was introduced by the Chief Executive Officer of Customs, following an application from Vossloh Cogifer Aust Pty Ltd for tariff concessions on certain swingnose crossings. The primary policy objective is to reduce the financial burden on importers by providing a lower rate of customs duty on these goods, specifically lowering it to free from the general rate of 5%. This was achieved by confirming that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria set out in the Customs Act. The instrument does not disadvantage any person by affecting their rights or imposing liabilities for actions taken before its registration, and it positively impacts importers by potentially enabling them to apply for duty refunds on goods imported since the instrument came into effect on 25 May 2010.
Scope and Application
The Tariff Concession Instrument No. 1023360 under the Customs Act 1901 applies specifically to Vossloh Cogifer Aust Pty Ltd’s application for a Tariff Concession Order (TCO) for certain swingnose crossings. The Act pertains to entities or individuals seeking reduced customs duties on specified goods, provided no substitutable goods are produced in Australia. The geographic scope of this legislation is national, as it falls under the Commonwealth’s jurisdiction. The application of this Act is restricted by section 269SJ, which excludes certain goods from being subject to a TCO. The instrument was created to ensure that if the Chief Executive Officer of Customs is satisfied that no substitutable goods were produced in Australia, they must make a written order for the TCO. This TCO, effective from 25 May 2010, applies a free rate of duty on the specified swingnose crossings, down from the general 5% rate, and does not impose any liabilities on persons other than the Commonwealth. The TCO also allows importers to apply for a refund of duties on these goods from the date it came into force.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1023360 (TCO No. 1023360) under the Customs Act 1901 are detailed in sections 269C, 269F, 269P and 269S. Section 269F allows for the application of a Tariff Concession Order (TCO) to be made by the Chief Executive Officer of Customs (CEO) for goods specified in the application, provided that certain criteria are met. Section 269C requires that no substitutable goods were produced in Australia on the day the application was lodged, which is a core criterion for the TCO to be granted. If these criteria are satisfied, section 269P mandates that the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This effectively reduces the duty rate for the specified goods, as demonstrated by the application made by Vossloh Cogifer Aust Pty Ltd regarding certain swingnose crossings, which were granted a duty rate of free under item 50 of Schedule 4.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must ensure that the application for a TCO meets the specified criteria, such as the absence of substitutable goods produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties if they believe the TCO should not be made. This is outlined in section 269K(1) of the Act. In this particular case, the CEO did not receive any submissions against the TCO. The applicant, in this instance Vossloh Cogifer Aust Pty Ltd, must also ensure that their application accurately reflects the goods and the reasons why the concession should be granted.
Should there be a breach of the provisions of the Customs Act 1901, various penalties and consequences may apply. Although the specific penalties are not detailed in the explanatory statement, breaches of customs legislation generally can result in substantial fines and, in more serious cases, criminal charges. The severity of the penalties can depend on the nature and extent of the breach. For instance, providing false information in an application for a TCO could lead to civil or criminal penalties, including fines and potential imprisonment. It is important to note that the specific penalties are outlined in the broader customs legislation and may not be explicitly stated in the explanatory statement for a particular TCO.