EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1140597
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 doors on 06 December 2011.
Instrument
TCO No 1140597 was made on 06 March 2012. It declares that those certain tram doors 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. 1140597 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 Parliament of Australia, facilitates the application of tariff concession orders (TCOs) to goods through Part XVA, which was introduced to address the need for tariff reductions on specific imported goods under certain conditions. This legislative provision allows the Chief Executive Officer of Customs to implement lower customs duty rates on goods that are subject to a TCO, provided the application meets the core criteria specified in the Act, such as the absence of substitutable goods produced in Australia. This initiative aims to foster fair trade practices by ensuring that imported goods are not subject to higher tariffs when locally produced alternatives are not available. TCO No. 1140597, made on 06 March 2012, exemplifies this process by granting tariff concessions on certain tram doors, thereby reducing their duty rate from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 1140597 under the Customs Act 1901 applies to specific goods, in this instance, certain tram doors, and governs the application of customs duty on these goods. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders, which apply a lower rate of customs duty to specified goods. The application for such a concession must meet the core criteria, including the absence of substitutable goods produced in Australia, and the CEO must be satisfied that the application does not pertain to goods specified as ineligible in section 269SJ of the Act. The instrument extends to the geographic jurisdiction of the Commonwealth of Australia and affects the rights of importers, offering them the potential for a duty refund for goods imported since the date the TCO is deemed to have come into force. The application of the TCO is retrospective to the date the application was lodged and does not impose liabilities on any person, including the Commonwealth.
The Act, through its subordinate instrument, TCO No. 1140597, specifies that the tram doors in question are subject to a duty-free concession, reducing the general rate of duty from 5% to zero. This concession applies nationally, aligning with the Commonwealth's legislative jurisdiction. The Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ, and ensures that the concession does not disadvantage any person by affecting their rights as at the date of registration. The TCO, once published in the Gazette and accepted by the CEO, allows for the specified tram doors to be imported without incurring customs duty, thereby benefiting importers of these goods.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 1140597, require that applications for Tariff Concession Orders (TCOs) are made to the Chief Executive Officer of Customs (CEO) (section 269F). For an application to be considered, it must not be in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO must then decide whether the application meets the core criteria outlined in section 269C. This decision hinges on whether, at the time of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E respectively. If the CEO is satisfied that these criteria are met, a written TCO is made declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by this legislation on the parties involved are primarily on the CEO of Customs, who must assess applications for TCOs against the specified criteria. The CEO must also ensure that any application that is not disqualified under section 269SJ is published in the Gazette, inviting submissions from any person who might oppose the granting of a TCO (subsection 269K(1)). In this particular case, Bombardier applied for a TCO on 6 December 2011, and the CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria. The CEO subsequently issued TCO No. 1140597 on 6 March 2012, declaring that the tram doors in question were subject to a duty-free rate under item 50 of Schedule 4 to the Tariff.
Breach of the provisions outlined in the Customs Act 1901 may lead to civil or criminal consequences. The Act does not specify maximum penalties but stipulates that failure to comply with the conditions of a TCO or any misrepresentation in an application can result in legal action. Importers, who benefit from the tariff concession, may also face penalties if they do not comply with other customs regulations. For example, incorrect declarations or fraudulent activities related to the importation of goods can lead to fines or other penalties as outlined in the Customs Act and associated regulations. The TCO itself does not impose any liabilities on any person, but adherence to the terms and conditions of the TCO is mandatory to avoid repercussions.