EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1123775
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.
Xstrata Rail (NSW) Pty Ltd applied for a TCO in respect of certain locomotive sandbox filling system on 18 July 2011.
Instrument
TCO No 1123775 was made on 05 October 2011. It declares that those certain locomotive sandbox filling system 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. 1123775 is taken to have come into force on 18 July 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, as amended, establishes a framework under which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods. Enacted by the Australian Parliament, this legislation addresses the need for tariff relief on specific imported goods where no suitable domestic alternatives are produced in Australia. The process involves an application to the CEO, who must determine if the application meets core criteria, such as the absence of substitutable goods produced domestically. Following the acceptance of a valid application and after an opportunity for public comment, the CEO issues a written order specifying the lower duty rate applicable to the goods in question. In this instance, TCO No. 1123775 was issued for a particular locomotive sandbox filling system on 18 July 2011, with the duty rate set at free, reducing from the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 1123775 under the Customs Act 1901 applies to goods specified in the instrument, namely certain locomotive sandbox filling systems. This act facilitates a lower rate of customs duty for these specified goods, which are granted a tariff concession order (TCO) following an application to the Chief Executive Officer of Customs (CEO). The application process requires the CEO to determine if the goods meet the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Once the CEO is satisfied that the core criteria are met, a written order is made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thus granting them a zero rate of duty as opposed to the general rate of 5%. The instrument does not affect any pre-existing rights or liabilities of any person other than the Commonwealth and provides beneficial rights to importers, such as the ability to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1123775 under the Customs Act 1901 (section 269F) allow for the application of a Tariff Concession Order (TCO) for certain goods, in this case, a locomotive sandbox filling system. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia on the date of application (section 269C), a TCO can be issued (section 269P(3)). This TCO declares that the specified goods are subject to a reduced duty rate as outlined in the Customs Tariff Act 1995 (section 50 of Schedule 4), in this case, reducing the duty from 5% to free. The TCO also stipulates that it comes into force on the date the application was lodged (section 269S(1)).
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must ensure their application meets the core criteria, particularly that no substitutable goods were produced in Australia on the application date (section 269C). The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons against the TCO (section 269K(1)). If no submissions are received, the CEO is required to proceed with making the TCO. Furthermore, the CEO must ensure that the TCO does not affect the rights of any person, other than the Commonwealth, adversely or impose any liabilities on such persons in respect of actions taken before the TCO's effective date (section 269S(1)).
Any breach of the provisions outlined in the Customs Act 1901 may lead to civil or criminal consequences. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally may result in fines, imprisonment, or both, depending on the severity of the offence. The maximum penalties can vary significantly, but they are typically stipulated in other sections of the Act or related regulations. For example, section 234 of the Customs Act 1901 provides for penalties for false statements or fraudulent conduct, which can include substantial fines and imprisonment. The exact penalties would depend on the specific nature of the breach.