EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513921
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.
Water Corporation applied for a TCO in respect of certain water treatment plant on 21 December 2005.
Instrument
TCO No 0513921 was made on 17 March 2006. It declares that those certain water treatment plant 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. 0513921 is taken to have come into force on 21 December 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. 0513921, enacted under the Customs Act 1901, addresses the need for reduced customs duties on specific goods where no substitutable alternatives are produced domestically. The instrument was introduced to facilitate the importation of essential goods by applying lower tariff rates, thereby supporting economic efficiency and potentially lowering costs for businesses that rely on these imports. The instrument was enacted by the Chief Executive Officer of Customs and is intended to provide a streamlined process for applying tariff concessions where no locally produced substitutes exist, thus ensuring that the application of tariff concessions aligns with the policy objective of fostering competitive markets and supporting industries reliant on imported goods. This instrument came into force on 21 December 2005, the date the application for the tariff concession was lodged, and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of customs duty on imported goods, including provisions for the application of tariff concession orders (TCOs) to reduce or eliminate duty on certain goods. Specifically, under Part XVA of the Act, the Chief Executive Officer of Customs (CEO) has the authority to make TCOs for goods that meet specific criteria, such as not having substitutable goods produced in Australia in the ordinary course of business. The process begins when an application is made to the CEO for a TCO, and if the application is deemed to meet the core criteria, the CEO must issue a written order declaring the goods to which the concession applies. The concession can reduce or eliminate the rate of duty on these goods. In the case of Tariff Concession Order No. 0513921, the CEO granted a concession for certain water treatment plant, setting the duty rate at free, effective from the date the application was lodged. This order is applicable nationally and benefits importers by allowing them to apply for refunds of duty paid on these goods since the effective date of the concession. The Act does not impose any liabilities on any person under this concession.
Key Provisions
The Tariff Concession Instrument No. 0513921 primarily establishes that certain water treatment plants are subject to a tariff concession order (TCO) under the Customs Act 1901 (section 269F). This order, which was made on 17 March 2006, declares that these water treatment plants are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). As a result, the general customs duty rate of 5% is reduced to free, making importation of these specific goods more affordable.
Under the Customs Act, the Chief Executive Officer of Customs (CEO) is tasked with determining whether an application for a TCO meets the core criteria. These criteria are set out in section 269C of the Act, which stipulates that a TCO application is valid if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also consider the definitions of ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ as provided in sections 269D, 269E, and 269B respectively. If the CEO is satisfied that the application meets these criteria, they are required to make a written order, which is the TCO itself (section 269P(3)).
The obligations imposed by the Customs Act on the CEO include ensuring that a TCO application is not in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the notice. The TCO also stipulates that it does not affect the rights of any person, except the Commonwealth, to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
Any breach of the provisions outlined in the Customs Act could result in legal consequences, although the explanatory statement does not detail specific offences, penalties, or consequences for breach. However, given the general framework of the Act, violations could potentially lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach and the specific sections of the Act contravened.