EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507355
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.
Aquatec Maxcon Pty Ltd applied for a TCO in respect of certain liquid gas separators on 15 June 2005.
Instrument
TCO No 0507355 was made on 2 September 2005. It declares that those certain liquid gas separators 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. 0507355 is taken to have come into force on 15 June 2005.
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 Australian Parliament, provides a framework for managing the importation of goods into Australia, including the establishment of customs duties. Part XVA of the Act introduces a scheme for Tariff Concession Orders (TCOs), which allow for lower customs duty rates on specified goods. The Tariff Concession Instrument No. 0507355, introduced on 2 September 2005, addresses the specific issue of applying a concessional tariff rate to certain liquid gas separators, where no substitutable goods are produced in Australia. This instrument was made following an application by Aquatec Maxcon Pty Ltd, and it was enacted to provide tariff relief for the importation of these goods, with the policy objective of facilitating trade by reducing the cost of importing specific goods not produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0507355, issued under the Customs Act 1901, applies to any person or entity seeking to import certain liquid gas separators by granting a tariff concession order (TCO) to reduce the customs duty from 5% to free. This act is administered at the Commonwealth level, applying to goods across Australia. The instrument was specifically enacted in response to an application from Aquatec Maxcon Pty Ltd on 15 June 2005, and it came into force on the same date. The TCO is designed to benefit importers by allowing them to apply for refunds of duty on goods imported since the effective date of the concession, without imposing any new liabilities on them or disadvantaging them in any way. The legislation ensures that the rights of all parties, except the Commonwealth, are preserved as at the date of registration, with no retroactive liabilities imposed. The CEO of Customs has the authority to make such orders, subject to certain criteria outlined in the Customs Act, and the process includes a public consultation period, although no submissions were received in this instance.
Key Provisions
The Customs Act 1901 (the Act) includes provisions that allow for the creation of Tariff Concession Orders (TCOs) through section 269F. When an applicant, such as Aquatec Maxcon Pty Ltd, applies for a TCO concerning certain goods like liquid gas separators, they are requesting a lower rate of customs duty (sections 269F and 269P(3)). If the Chief Executive Officer (CEO) of Customs is convinced that the application meets the core criteria, particularly that no substitutable goods were produced in Australia in the ordinary course of business (section 269C), a TCO is issued. In the case of TCO No. 0507355, this order declared that certain liquid gas separators are subject to a duty rate of free, instead of the general rate of 5% (section 269P(3)).
The Act imposes several obligations on the parties involved in the TCO process. The CEO of Customs must assess applications to determine if they meet the core criteria (section 269C). If the application is deemed valid, the CEO must then issue a written order specifying the goods and the applicable tariff concession (section 269P(3)). Additionally, as per section 269K(1), the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit their views on whether the TCO should be made. In this instance, no submissions were received, indicating that no objections were raised against the TCO.
The Act also includes provisions for the consequences of non-compliance with its requirements. Although the Explanatory Statement does not detail specific offences, penalties, or consequences for breach, it is understood that failure to comply with the Act's requirements could result in civil or criminal penalties, depending on the nature and severity of the breach. The Customs Act 1901 and related regulations would provide further details on the specific offences and penalties applicable in such cases. The TCO itself, however, does not impose any liabilities on any person and does not affect the rights of any person except to the benefit of importers who can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).