EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139174
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.
Co-Operative Bulk Handling applied for a TCO in respect of certain wagon parts on 23 November 2011.
Instrument
TCO No 1139174 was made on 13 February 2012. It declares that those certain wagon parts 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. 1139174 is taken to have come into force on 23 November 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods in Australia. The Act provides a framework for the imposition of customs duty and the establishment of tariff concession orders (TCOs) to provide tariff relief on certain goods. The Tariff Concession Instrument No. 1139174, made in 2012, is an example of such an instrument. This particular TCO was introduced to address the issue of providing tariff relief for certain wagon parts, which were not being produced in Australia at the time of application. The Tariff Concession Order was made by the Chief Executive Officer of Customs, in accordance with the Act, after it was determined that there were no substitutable goods produced in Australia that could replace the imported wagon parts. The policy objective was to facilitate the importation of these goods at a lower duty rate, thereby promoting trade and economic efficiency. The instrument was published in the Gazette, with no submissions received from the public, and came into effect on the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1139174, pursuant to Part XVA of the Customs Act 1901, applies to goods specified in the instrument, namely certain wagon parts, which are subject to a lower rate of customs duty as declared in the instrument. The application of the instrument is directed at entities and individuals who import these specific goods, with the overarching goal of reducing the customs duty on them from the general rate of 5% to a free rate. The instrument extends to the whole of Australia and is effective from the date the application was lodged, 23 November 2011. Any person, other than the Commonwealth, is not disadvantaged or imposed with new liabilities in respect of actions taken before the instrument's effective date. The instrument is an extension of the Customs Act 1901 and the Customs Tariff Act 1995, with the CEO of Customs being the authority to make such tariff concession orders if certain criteria are met, notably the absence of substitutable goods produced in Australia. The instrument's scope is limited to the specified goods, and no broader exclusions or exemptions are mentioned in the explanatory statement.
Key Provisions
The key provisions of the Customs Act 1901, particularly under Part XVA, revolve around the establishment and administration of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). These sections allow the Chief Executive Officer of Customs (CEO) to reduce or eliminate customs duty on specific goods, provided certain criteria are met. For instance, an applicant must demonstrate that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs, and that no substitutable goods are produced in Australia (section 269C). If the CEO is satisfied with the application, they must issue a TCO, declaring that the specified goods are subject to a prescribed tariff item (section 269P(3)).
The obligations imposed by the Act on parties involve ensuring that TCO applications are complete and accurate. The CEO has the responsibility to evaluate each application against the specified criteria, such as the absence of substitutable goods produced in Australia (section 269C). The CEO must also publish notices in the Gazette to invite submissions from interested parties if they consider the TCO should not be granted (subsection 269K(1)). This ensures transparency and allows for stakeholder input before a TCO is issued.
Breach of the provisions under the Customs Act 1901 may result in civil or criminal penalties. While the explanatory statement does not detail specific offences related to the TCO process, general provisions of the Act include potential fines and imprisonment for breaches of customs regulations. For example, misleading statements or fraudulent activities related to customs duties can attract severe penalties. However, the specific maximum penalties for these breaches are not detailed in the explanatory statement but can be found within the broader scope of the Customs Act and associated regulations.