EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134629
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.
Invensys Rail applied for a TCO in respect of certain railway boom gate mechanical lifters on 14 October 2011.
Instrument
TCO No 1134629 was made on 09 January 2012. It declares that those certain railway boom gate mechanical lifters 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. 1134629 is taken to have come into force on 14 October 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, enacted by the Parliament of Australia, includes provisions for the creation of Tariff Concession Orders (TCOs) under Part XVA, which allow for a lower rate of customs duty on specified goods. The purpose of this legislative framework is to facilitate applications from individuals or entities seeking reduced duty rates for goods not produced domestically in the ordinary course of business, provided they meet the core criteria outlined in the Act. This mechanism is designed to support industries by reducing the cost of imported goods, thereby promoting economic efficiency and competitiveness. TCO No. 1134629, issued on 9 January 2012, is an example of this process, where the Chief Executive Officer of Customs granted Invensys Rail's application for tariff concessions on certain railway boom gate mechanical lifters, effective from 14 October 2011. This particular TCO aims to alleviate the financial burden on importers of these goods by setting the duty rate at free, as opposed to the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 1134629, made under section 269F of the Customs Act 1901, applies to entities seeking tariff concessions for specific goods, in this case, certain railway boom gate mechanical lifters, as applied for by Invensys Rail. This Instrument is applicable at the Commonwealth level, extending across the entirety of Australia, and affects all individuals and entities involved in the importation of these specified goods. The application of this Instrument is contingent on the goods not being produced in Australia and the absence of substitutable goods, as outlined in sections 269C and 269D of the Act. The geographic reach of this legislation is nationwide, ensuring uniformity in tariff concessions across all states and territories of Australia. The Tariff Concession Order does not impose any liabilities or disadvantage existing rights of any person, except for the Commonwealth, with respect to actions taken prior to the date of registration. Furthermore, it allows for the refund of duty on goods imported since the day the TCO is deemed to have come into force, thereby providing a financial benefit to importers. The CEO is required to publish a notice inviting submissions against the TCO application, although in this instance, no submissions were received. The commencement of this TCO is effective from the date the application was lodged, ensuring timely implementation of the tariff concession.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1134629 include section 269F, which outlines the process for applying for a Tariff Concession Order (TCO) (s 269F). This section allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the application does not relate to goods specified in section 269SJ of the Customs Act 1901 (the Act) (s 269SJ). The CEO must then determine if the application meets the core criteria, as defined in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). If the application meets the criteria, the CEO is required to issue a written order, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (s 269P(3)). TCO No 1134629 applies to certain railway boom gate mechanical lifters, granting them a duty-free status by applying item 50 of Schedule 4 to the Tariff (s 269P(3)).
The Act imposes specific obligations on the parties involved. For example, under subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice invites any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (s 269K(1)). The CEO did not receive any submissions in response to this invitation for TCO No 1134629 (s 269K(1)). Additionally, under subsection 269S(1) of the Act, a TCO is taken to have come into force on the day on which the application for the TCO was lodged (s 269S(1)). In this case, TCO No. 1134629 is deemed to have come into force on 14 October 2011.
Breach of the provisions set out in the Customs Act 1901 may result in civil or criminal consequences. Under section 235 of the Act, any person who contravenes a provision of the Act, or any regulation made under the Act, is liable to a penalty. The maximum penalty for individuals is 10,000 penalty units or imprisonment for five years, or both, while for bodies corporate, the maximum penalty is 50,000 penalty units or imprisonment for five years, or both (s 235). These penalties serve as deterrents to ensure compliance with the Act and the associated TCOs.