EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604745
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 pumping plant on 6 March 2006.
Instrument
TCO No 0604745 was made on 12 May 2006. It declares that those certain water pumping 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. 0604745 is taken to have come into force on 6 March 2006.
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 was enacted by the Parliament of Australia and is administered by the Chief Executive Officer of Customs. The Act establishes a framework for the imposition of customs duties on imported goods, and includes provisions for the grant of tariff concessions to certain goods, as detailed in Part XVA. This part of the Act was introduced to address the need for a mechanism to grant tariff concessions on goods that are not produced in Australia, thereby promoting efficiency and economic competitiveness. Tariff Concession Order No. 0604745 was introduced on 12 May 2006 in response to an application from the Water Corporation, seeking a concession on water pumping plant. The order was made under the authority of the Act, and was effective from 6 March 2006, the date on which the application was lodged. The order provides for a concession on certain water pumping plant, reducing the general rate of duty from 5% to free, and was made after the CEO was satisfied that no substitutable goods were produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0604745 under the Customs Act 1901 applies to specific water pumping plant goods imported into Australia, facilitating a concession on customs duty for these goods. The Act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods where no substitutable goods are produced in Australia in the ordinary course of business. The instrument specifically benefits Water Corporation, which applied for the concession, by allowing the importation of certain water pumping plant at a zero duty rate, down from the general rate of 5%. The application of the Act is national in scope, aligning with the Commonwealth's jurisdiction over customs duties. The TCO does not impose any new liabilities on persons other than the Commonwealth and does not affect any existing rights as at the date of registration. Any exclusions or exemptions are determined by the criteria set out in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The instrument may also extend its application through subordinate instruments as necessary.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0604745 under the Customs Act 1901 (sections 269C, 269P(3), and 269S) establish the conditions under which a Tariff Concession Order (TCO) can be made. Section 269C sets the core criteria for TCO applications, requiring that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets these criteria, they must make a written order (a TCO). Section 269S specifies that the TCO is taken to have come into force on the day the application was lodged.
The Act imposes specific obligations on parties applying for a TCO and on the CEO of Customs. Applicants must ensure that their application is lodged in accordance with the Act and that it pertains to goods that are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO is obligated to assess the application against the core criteria, publish a notice in the Gazette inviting submissions, and make a decision on the application based on whether it meets the criteria. In this case, since no submissions were received, the CEO proceeded to make the TCO.
Failure to comply with the requirements of the Act may result in civil or criminal consequences. While the Explanatory Statement does not explicitly state any penalties for breaches, the Customs Act 1901 generally provides for various offences and penalties, including fines and imprisonment, for non-compliance with customs regulations. The specifics of penalties would depend on the nature and severity of the breach, as well as other relevant laws.