EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510033
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.
Ravensthorpe Nickel Operations Pty Ltd applied for a TCO in respect of a certain water treatment plant on 11 July 2005.
Instrument
TCO No 0510033 was made on 28 October 2005. It declares that those certain water treatment plants 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. 0510033 is taken to have come into force on 11 July 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 Parliament of Australia, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to reduce customs duty rates for specified goods. This legislative measure was introduced to address the problem of ensuring that Australian businesses can access certain goods at a lower cost when there are no suitable domestic alternatives. In particular, the Act aims to facilitate the import of goods that are essential for industry or commerce but are not produced domestically. In line with these objectives, Tariff Concession Instrument No. 0510033 was enacted on 28 October 2005, providing a tariff concession for a specific water treatment plant, thereby reducing the duty from the general rate of 5% to free. This concession was made following an application by Ravensthorpe Nickel Operations Pty Ltd, and no objections were raised during the consultation period.
Scope and Application
The Customs Act 1901, under Part XVA, provides for the creation of Tariff Concession Orders (TCOs) that can be applied to specific goods to reduce their customs duty rates. This Act applies to any person or entity seeking to reduce the customs duty on goods by applying for a TCO through the Chief Executive Officer of Customs. This process is specifically designed to benefit industries importing goods that are not produced in Australia, thereby ensuring no domestic production is adversely affected. The Act’s application is national in scope, as it is a Commonwealth Act, impacting all states and territories within Australia. However, it excludes goods specified in section 269SJ, which cannot be subject to a TCO. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, although the specifics of these are not outlined in the explanatory statement for Instrument No. 0510033.
Key Provisions
The primary operative sections of this legislation, namely section 269F, 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901, facilitate the application and approval process for Tariff Concession Orders (TCOs). A person may apply for a TCO for specific goods under section 269F, provided the goods are not listed in section 269SJ. The Chief Executive Officer (CEO) of Customs must then determine if the application meets the core criteria outlined in sections 269C, 269B, 269D, 269E, and 269P. If the application is deemed to meet these criteria, the CEO is obligated to issue a written TCO, as stipulated in section 269P(3).
The Act imposes several obligations and requirements on the parties involved. For instance, the CEO must ensure that the goods in question are not specified in section 269SJ and must verify that no substitutable goods were produced in Australia on the date the application was lodged, as per section 269C. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions on the application, although no submissions were received in this case.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline offences or penalties specific to TCOs. However, any failure to comply with the conditions set out in the Act, such as submitting false information during the application process, could lead to broader legal consequences under other sections of the Customs Act or related legislation. For instance, providing false information could result in penalties under sections related to fraudulent activities.
This instrument, TCO No. 0510033, specifically addresses a water treatment plant and reduces the customs duty rate from the general 5% to free, effective from 11 July 2005. The rights of importers are protected, and they can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on individuals or entities.