The applicant sought a Tariff Concession Order (TCO) to import driverless trains free of duty. Without the TCO, each train imported would attract a five per cent duty. The applicant already manufactured electric passenger trains in Australia, but at the time of application no driverless passenger trains had been produced in Australia. The applicant in this case supplied the NSW government with the driverless trains that now run on the Sydney metro system.
The Comptroller-General of Customs refused the TCO and the applicant asked the AAT to review that decision.
The key question for the AAT was whether the TCO application met the core criterion that on the day the application was lodged no substitutable goods were produced in Australia in the ordinary course of business. The main issue in this review was about the definition of ‘substitutable goods’, which focuses on the ‘use’ of the goods. In the case of driverless trains, this definition requires a comparison between the ‘use’ of the goods in question and whether existing goods can be put to that use. The AAT accepted the respondent’s submission that the ultimate use of the trains in question was the transport of passengers by rail, a use which the trains manufactured in Australia at the relevant time shared with the goods which were the subject of the TCO.
The applicant argued that the only potential use of the goods on the TCO application was to transport passengers on a driverless metropolitan train line. The applicant stated that no goods having that use were being produced in Australia at the time the application was made.
The AAT looked at a number of previous decisions that have suggested the focus in determining the use of goods should be on the ‘ultimate use’ of them. Whilst the applicant submitted that the only use to which the goods the subject of the TCO are put or can be put is the transport of passengers on a driverless train, the AAT affirmed that, at the relevant time, substitutable goods were manufactured in this country.
The decision to refuse the application for the TCO was affirmed by the AAT.
Read the full decision on AustLii.