EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507356
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 effluent odour controllers on 15 June 2005.
Instrument
TCO No 0507356 was made on 2 September 2005. It declares that those certain effluent odour controllers 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. 0507356 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 the imposition of customs duties on imported goods. Part XVA of this Act introduces a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). This scheme was introduced to address the need for tariff concessions in cases where no substitutable goods are produced in Australia, thereby promoting trade and economic efficiency. A TCO application must meet specific core criteria, such as the absence of substitutable goods produced in Australia, to be approved by the CEO. Upon approval, the CEO issues a written order that applies a prescribed lower rate of duty to the specified goods, as outlined in Schedule 4 to the Customs Tariff Act 1995. The policy objective is to facilitate the import of goods that are not domestically produced, thereby supporting the availability of goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0507356, made under the Customs Act 1901, applies to certain effluent odour controllers and is directed towards individuals or entities involved in the importation of these goods. The legislation facilitates the application of a lower rate of customs duty to these specified goods, which is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this Act is national, as it is a Commonwealth instrument. The Act does not specify any exclusions or exemptions and operates within the framework set by the Customs Act 1901 and the Customs Tariff Act 1995. The application of the Act may be further detailed or refined through subordinate instruments, but no such instruments are mentioned in the explanatory statement. The commencement date for this Tariff Concession Order is the date the application was lodged, which was 15 June 2005, and it does not retroactively affect any rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0507356 under the Customs Act 1901 applies to certain effluent odour controllers, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This instrument, made by the Chief Executive Officer of Customs (CEO), provides a concession by reducing the duty on these goods from 5% to free (section 269P(3)). This is contingent on the CEO being satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also consider that the application does not pertain to goods listed in section 269SJ, which are ineligible for a tariff concession order (section 269F).
The Act imposes several obligations on the parties involved. The applicant must ensure that their application meets the core criteria set out in section 269C, which includes demonstrating that no substitutable goods were produced in Australia in the ordinary course of business. The CEO has the responsibility to verify these criteria and, if satisfied, to make a written order (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made (subsection 269K(1)). This notice was published, but no submissions were received in response to the invitation.
Failure to comply with the requirements of the Customs Act 1901 can result in various consequences. Although the explanatory statement does not specify penalties for breaches of the Act, the general provisions of the Act and related legislation may include fines and imprisonment. For instance, misleading or false statements in relation to a TCO application can attract civil penalties and, in some cases, criminal penalties under section 283AB of the Customs Act 1901. Such offences could lead to substantial fines and imprisonment for individuals and corporations, depending on the severity and intent behind the breach.
The Tariff Concession Instrument No. 0507356 benefits importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). Importantly, this instrument does not impose any new liabilities on any person and does not disadvantage anyone except the Commonwealth (subsection 269S(1)). This ensures that the rights of individuals or entities are not adversely affected by the TCO.