EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1031338
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.
Voestalpine Schienen Gmbh applied for a TCO in respect of certain rail on 09 July 2010.
Instrument
TCO No 1031338 was made on 29 September 2010. It declares that those certain rail 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. 1031338 is taken to have come into force on 09 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. 1031338, enacted under the Customs Act 1901, addresses the issue of facilitating the importation of goods by providing tariff concessions. This instrument was introduced to streamline the customs process by allowing the Chief Executive Officer of Customs to reduce or eliminate customs duty on specific goods when it is determined that there are no substitutable goods produced in Australia. This concession aims to support industries that rely on imported goods by lowering the cost of these imports, thereby promoting economic efficiency and competitiveness. The instrument was developed in response to an application by Voestalpine Schienen Gmbh for tariff concessions on certain rail products, and it was effective from the date the application was lodged, 9 July 2010. The policy objective behind this measure is to provide tariff relief where appropriate, ensuring that Australian industries can access necessary materials without the burden of high customs duties, thereby fostering economic growth and industrial competitiveness.
Scope and Application
The Tariff Concession Instrument No. 1031338 under the Customs Act 1901 applies to the import of certain rail, as specified by the instrument, and pertains to the goods for which Voestalpine Schienen Gmbh applied for tariff concession on 9 July 2010. This instrument applies to the Commonwealth and affects the rights of importers by providing them with the ability to claim a refund of duty on goods imported since the date the TCO is taken to have come into force. The instrument imposes no liabilities on any person. The geographic reach of this Act extends to the national level, as it is a Commonwealth Act. The Act 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 application of the Act may be extended or restricted through subordinate instruments.
Key Provisions
The key operative sections of the Tariff Concession Order No. 1031338 include section 269C (1) and (2) of the Customs Act 1901, which set out the conditions under which a Tariff Concession Order (TCO) may be issued. According to section 269C (1), a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269C (2) further clarifies that a TCO application must not be in respect of goods specified in section 269SJ of the Act, which includes those goods that cannot be subject to a TCO. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as outlined in section 269P (3). In this case, TCO No. 1031338 was made on 29 September 2010, declaring that certain rail were subject to item 50 of Schedule 4, with a rate of duty of free.
The Customs Act 1901 imposes several obligations and requirements on the parties involved in the TCO process. The CEO must ensure that a TCO application meets the core criteria before issuing a TCO. This includes verifying that no substitutable goods were produced in Australia and that the application does not involve goods specified in section 269SJ. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. While no submissions were received for TCO No. 1031338, the requirement to publish a notice and consider any submissions is a crucial part of the process. Furthermore, the Act stipulates that the TCO does not affect the rights of a person, other than the Commonwealth, as at the date of registration, ensuring that the rights of importers will be beneficially affected.
The Customs Act 1901 and related legislation provide for various offences, penalties, and consequences for breaches. While the explanatory statement does not specify offences or penalties directly related to TCO applications, general provisions of the Customs Act may apply. For example, section 190 of the Act provides for penalties for offences such as the importation of prohibited goods, which could carry a maximum penalty of up to 10 years imprisonment or a fine of up to $220,000, or both, for individuals, and up to $1,100,000 for bodies corporate. Additionally, section 269P (4) of the Act states that a TCO is subject to the conditions and provisions of the Act and the Regulations, meaning that any breach of these conditions could result in legal consequences. The TCO itself does not impose any new liabilities on any person, but adherence to the terms and conditions of the TCO is necessary to avoid potential penalties or legal actions.