EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1140593
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 gangways on 06 December 2011.
Instrument
TCO No 1140593 was made on 06 March 2012. It declares that those certain gangways 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. 1140593 is taken to have come into force on 06 December 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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties, including the ability for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) that offer a lower rate of customs duty on specified goods. The Tariff Concession Instrument No. 1140593 was introduced to address the specific needs of Bombardier, who sought a tariff concession on certain gangways, by granting a duty-free status on these goods in recognition that no substitutable goods were produced in Australia at the time of application. This instrument was made under the authority of the Customs Act 1901, aiming to facilitate trade and potentially reduce costs for importers of these specific goods, thereby aligning with the broader policy objective of promoting efficient and competitive import practices within Australia.
Scope and Application
The Customs Act 1901, through Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities that may apply for a TCO concerning specific goods not produced in Australia, thereby qualifying for a lower rate of customs duty. Such applications must meet core criteria, primarily that no substitutable goods are produced in Australia at the time of application, as defined by sections 269C, 269D, and 269E of the Act. The instrument extends to the Commonwealth level, influencing customs duties on goods entering Australia. Notably, certain goods specified in section 269SJ of the Act are excluded from TCO eligibility. The application of this legislation can be further extended or restricted through subordinate instruments, although no specific extensions or restrictions are mentioned in the provided context. The rights of importers are positively affected as they can apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901, particularly under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). These orders can result in a reduced rate of customs duty on certain goods. When an individual or entity applies for a TCO, the CEO assesses whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged (section 269C). If the criteria are met, the CEO is mandated to issue a written order, declaring that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995 (subsection 269P(3)).
The obligations imposed by the Customs Act 1901 on entities or individuals applying for a TCO include ensuring that their application is made in good faith and that it complies with all the statutory requirements. This includes providing sufficient evidence that no substitutable goods are produced in Australia. The CEO, on the other hand, is obligated to review the application, assess its validity, and if applicable, make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO (subsection 269K(1)).
Failure to comply with the provisions of the Customs Act 1901, including submitting false information in a TCO application, may result in criminal and civil consequences. Although the explanatory statement does not specify particular offences or penalties, it is reasonable to infer that penalties for non-compliance could include fines and imprisonment as stipulated by other sections of the Customs Act 1901. The maximum penalties could vary depending on the severity of the offence, but they are typically substantial to deter non-compliance and protect the integrity of the customs duty system.