EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1030590
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 Australia Pty Ltd applied for a TCO in respect of certain swingnose crossing rail drive locking detection systems on 06 July 2010.
Instrument
TCO No 1030590 was made on 06 October 2010. It declares that those certain swingnose crossing rail drive locking detection systems 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. 1030590 is taken to have come into force on 06 July 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. 1030590, enacted in 2010, provides for tariff concessions under the Customs Act 1901, which was amended to introduce a scheme allowing for the application of lower customs duty rates on specified goods through Tariff Concession Orders (TCOs). This initiative was designed to address the gap in the tariff structure by offering reduced duty rates for certain goods where no suitable Australian-made alternatives exist, thereby supporting industries that rely on imported components. The instrument was created following an application by Vossloh Cogifer Australia Pty Ltd for tariff concessions on swingnose crossing rail drive locking detection systems, which was subsequently approved by the Chief Executive Officer of Customs. The policy objective is to foster economic efficiency and competitiveness by enabling businesses to access necessary imported goods at a reduced cost, which can then be passed on to consumers or reinvested into the business.
Scope and Application
The Tariff Concession Instrument No. 1030590 applies to specific goods, namely certain swingnose crossing rail drive locking detection systems, and is concerned with the application and administration of tariff concessions under the Customs Act 1901. The Act applies to any person or entity that wishes to import these particular goods into Australia and seek a tariff concession. The geographic reach of this Act is national, as it is an instrument under the Commonwealth's customs legislation. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which lists those goods that cannot be subject to a tariff concession order. The application of the Act may be extended or restricted through subordinate instruments, as outlined in the Customs Tariff Act 1995. The tariff concession in question provides a rate of duty of free, as opposed to the general rate of 5% for these goods, thereby benefiting importers who have imported the goods since the day the concession is deemed to have come into force.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO). The Act allows for a lower rate of customs duty on goods subject to a TCO. Section 269F of the Act permits a person to apply to the CEO for a TCO in respect of goods. If the CEO determines that the application is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C.
The core criteria are met if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This means that if the CEO is satisfied that the goods in question are not being produced domestically and thus cannot be substituted, a TCO can be granted. Section 269P(3) then requires the CEO to make a written order if the application meets these criteria. This order specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods, effectively reducing the duty rate.
Obligations under the Act include the requirement for the CEO to publish a notice in the Gazette inviting submissions on the TCO application once it is deemed valid. This ensures transparency and allows stakeholders to voice any concerns. The TCO does not disadvantage any person other than the Commonwealth and does not impose new liabilities on individuals or entities. It only affects the rights of importers beneficially by allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force.
The Act provides for specific consequences and penalties for breaches. While the explanatory statement does not explicitly mention penalties, breaches of the Customs Act can generally result in civil or criminal penalties, including fines and imprisonment. The severity of these penalties can depend on the nature and extent of the breach, as well as any associated intent or negligence. For instance, knowingly making false statements or engaging in fraudulent activities can lead to more severe penalties.