EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507396
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.
Wedeco AVP Pty Ltd applied for a TCO in respect of certain Water Purifiers on 16 June 2005.
Instrument
TCO No 0507396 was made on 2 September 2005. It declares that those certain Water Purifiers 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 0%.
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. 0507396 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0507396, enacted in 2005, amends the Customs Act 1901 to provide tariff concessions for specific Water Purifiers. This legislative instrument was introduced to address the need for facilitating the importation of certain goods by reducing or eliminating customs duty on them, provided no suitable substitute is produced in Australia. This instrument was enacted by the Commonwealth of Australia, through its relevant authorities, aiming to support importers by lowering their costs and enhancing the competitiveness of imported goods in the Australian market.
The process involves an application to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria, specifically if no substitutable goods are produced in Australia. Upon meeting these criteria, a Tariff Concession Order is issued, resulting in a reduction or elimination of customs duty on the specified goods. This particular instrument, effective from the date of application, ensures that importers can claim refunds on duties paid on these goods since the inception of the concession, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0507396 under the Customs Act 1901 applies to the specific goods identified in the instrument, namely certain Water Purifiers, and is directed at entities or individuals seeking to import these goods into Australia. The Act allows for the application of lower rates of customs duty on goods that are subject to a Tariff Concession Order (TCO). The instrument was made by the Chief Executive Officer of Customs following an application by Wedeco AVP Pty Ltd, who applied for a TCO for the Water Purifiers on 16 June 2005. The instrument came into effect on the same date, in accordance with section 269S(1) of the Act. The TCO reduces the duty on these goods from the general rate of 5% to 0%. The instrument’s application is limited to the Commonwealth and does not affect the rights of any person, other than the Commonwealth, as at the date of registration nor does it impose any liabilities on any person. The scope of the instrument is confined to the specified goods and the import transactions of these goods into Australia.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0507396, as referenced under the Customs Act 1901 (section 269F), detail the process for applying for a Tariff Concession Order (TCO) and the conditions under which such an order may be granted. The instrument specifically pertains to Water Purifiers, designating these goods to be subject to a zero per cent customs duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This means that the normal 5 per cent duty rate on these Water Purifiers is waived if the conditions for a TCO are met.
The obligations imposed by this Act on the parties or entities it governs are primarily directed towards ensuring that the application for a TCO is valid and meets the specified criteria. The Chief Executive Officer of Customs (CEO) is required to assess whether the application meets the core criteria, which include verifying that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this instance, the CEO did not receive any submissions against the application.
Breaching the conditions or failing to comply with the obligations outlined in the Customs Act 1901 may lead to civil or criminal consequences. Although the specific penalties are not detailed in the explanatory statement, general provisions under the Act could impose fines or other penalties for non-compliance. For instance, if a party submits a fraudulent application for a TCO or if a person knowingly imports goods without the benefit of a valid TCO, they could face penalties under the Customs Act. The maximum penalties for such offences could include significant fines and, in severe cases, imprisonment, depending on the nature and extent of the breach.
In summary, Tariff Concession Instrument No. 0507396 under the Customs Act 1901 provides a framework for granting tariff concessions on Water Purifiers, ensuring that the application process is transparent and that the rights of all parties are considered. The CEO's role in assessing applications and publishing notices in the Gazette is crucial in maintaining the integrity of the scheme. Compliance with these provisions is mandatory, and any breaches could result in substantial penalties.