EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610331
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.
Central Gippsland Water Authority applied for a TCO in respect of certain wastewater treatment plant on 13 June 2006.
Instrument
TCO No 0610331 was made on 1 September 2006. It declares that those certain wastewater 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 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. 0610331 is taken to have come into force on 13 June 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 establishes the framework for the administration of customs duties and other import and export requirements. Among its provisions, Part XVA of the Act sets out the scheme for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on specified goods under certain conditions. This legislative instrument was introduced to address the need for tariff concessions to support specific industries and projects by lowering the financial burden of importing certain goods. The explanatory statement details Tariff Concession Instrument No. 0610331, made on 1 September 2006, which provides a zero per cent duty rate on certain wastewater treatment plants applied for by the Central Gippsland Water Authority. The policy objective, as per the Act, was to ensure that the application met the core criteria, specifically that no substitutable goods were produced in Australia at the time of application. The instrument was published in the Gazette with an invitation for public submissions, though none were received. The TCO came into force on 13 June 2006, the date the application was lodged, and it benefits importers by allowing them to apply for a refund of duty on the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0610331 under the Customs Act 1901 applies to any goods specified in the instrument, which in this case are certain wastewater treatment plants. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on specified goods. This instrument was made in response to an application by the Central Gippsland Water Authority and came into force on the date the application was lodged, 13 June 2006. The geographic and jurisdictional reach of the Act is Commonwealth, as it pertains to the regulation of customs and tariffs across Australia. The Act does not apply to goods specified in section 269SJ, which lists items ineligible for tariff concessions. Subordinate instruments may extend or restrict the application of the Act, but the primary legislation sets out the core criteria and process for making TCOs. The instrument does not disadvantage any persons other than the Commonwealth and allows importers to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 provides for the establishment of Tariff Concession Orders (TCOs) under section 269F, which allows the Chief Executive Officer of Customs (CEO) to grant lower rates of customs duty for specified goods. In this case, TCO No. 0610331 applies to certain wastewater treatment plants and reduces the duty rate from 5% to 0%. This order was made on 1 September 2006, following an application by the Central Gippsland Water Authority on 13 June 2006, and it came into effect from the date the application was lodged. The CEO's decision to grant the TCO was based on the absence of substitutable goods produced in Australia on the application date, as required by section 269C.
The Act imposes several obligations on the CEO in relation to the processing of TCO applications. Firstly, the CEO must ensure that the application is valid and not in respect of goods specified in section 269SJ, which are ineligible for TCOs. If the application meets these criteria, the CEO must then determine whether it meets the core criteria outlined in section 269C, which involves verifying that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made, although in this case, no such submissions were received.
Failing to comply with the requirements of the Customs Act 1901 can lead to both civil and criminal consequences. Under section 278, a person who knowingly or recklessly makes a false or misleading statement in an application for a TCO may be liable to a penalty of up to 10,000 penalty units for an individual or 50,000 penalty units for a body corporate. Additionally, under section 279, a person who contravenes a provision of the Act or the Regulations may be liable to a penalty of up to 10,000 penalty units for an individual or 50,000 penalty units for a body corporate, or to imprisonment for up to five years, or both, if the offence is committed while the person is an officer of a corporation. These penalties underscore the importance of adhering to the legal requirements set out in the Act when applying for a TCO.