EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113932
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.
Bombardier applied for a TCO in respect of certain tram car driving bogies on 28 April 2011.
Instrument
TCO No 1113932 was made on 18 July 2011. It declares that those certain tram car driving bogies 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. 1113932 is taken to have come into force on 28 April 2011.
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, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Enacted by the Australian Parliament, the Act addresses the issue of providing tariff concessions on certain goods to promote trade and economic efficiency by potentially reducing the cost of imported goods. This legislative framework was designed to lower the rate of customs duty for goods that are the subject of a TCO, provided that no substitutable goods are produced in Australia. This is contingent upon meeting the core criteria set out in the Act, ensuring that the concession is granted only when it serves to enhance competitive advantage without disadvantaging domestic producers. The policy objective is to support Australian businesses by making imported goods more affordable, thereby encouraging trade and economic growth. In the case of TCO No. 1113932, Bombardier’s application for tariff concessions on certain tram car driving bogies was approved, resulting in a reduction of customs duty from 5% to free, effective from the date of application.
Scope and Application
The Customs Act 1901, under which the Tariff Concession Order (TCO) No. 1113932 has been made, applies to any person or entity seeking to import goods into Australia and who qualifies for a tariff concession. The Act provides a mechanism for the Chief Executive Officer of Customs to consider and approve applications for tariff concessions, ensuring that the goods in question are not substitutable by domestically produced goods. This concession is particularly relevant for imports of certain tram car driving bogies, where Bombardier was the applicant, and the application was approved based on the absence of substitutable goods produced in Australia. The order, which came into effect on 28 April 2011, grants a tariff concession that lowers the duty rate from 5% to free, benefitting the importer. The scope of the Act is national, applying across all jurisdictions within Australia, though the application process and concession specifics are managed by the Commonwealth. The Act does not disadvantage any person or impose liabilities for actions taken prior to the registration of the TCO, and it allows for the potential refund of duty paid on the specified goods since the effective date of the concession.
Key Provisions
The key provisions of this legislation are contained within section 269 of the Customs Act 1901, which outlines the process for Tariff Concession Orders (TCOs). Specifically, section 269F permits an application for a TCO from any person seeking a lower rate of customs duty on goods. Section 269C then details the core criteria that must be met for an application to be considered, which includes ensuring that no substitutable goods are produced in Australia at the time of the application. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, section 269P(3) mandates that a TCO be issued, declaring the applicable duty rate for the goods in question.
The obligations imposed by the Act primarily rest on the CEO, who must ensure that applications for TCOs are assessed against the core criteria outlined in section 269C. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may wish to oppose the making of a TCO. These provisions ensure a transparent and inclusive process for the consideration of TCO applications.
Failure to comply with the requirements of the Act can result in significant consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the Act could potentially lead to legal challenges or administrative penalties. The absence of submissions in response to the Gazette notice does not necessarily imply a breach but rather reflects the procedural adherence observed in this instance. The legislative framework, however, implies that any non-compliance with the prescribed procedures could be subject to judicial review or other corrective actions as deemed necessary by the relevant authorities.