EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615762
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.
ITT Fluids Technology applied for a TCO in respect of certain submersible water pumps on 06 November 2006.
Instrument
TCO No 0615762 was made on 09 March 2007. It declares that those certain submersible water pumps 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. 0615762 is taken to have come into force on 06 November 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 to provide a comprehensive framework for the regulation of customs and excise duties. The Act includes provisions for the imposition of tariffs on imported goods, among other regulatory measures. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act addresses the problem of applying reduced customs duties to specific goods, provided certain conditions are met, such as the absence of substitutable goods produced in Australia. This mechanism supports economic efficiency by allowing the importation of goods at a lower duty rate when local production does not sufficiently meet demand or when the imported goods offer unique benefits. Instrument TCO No. 0615762, made on 09 March 2007, exemplifies this process by granting tariff concessions on certain submersible water pumps, resulting in a free duty rate instead of the general 5%. The objective is to facilitate trade and economic activity by reducing costs associated with customs duties on essential goods.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0615762, applies to entities or individuals seeking tariff concessions for specific goods entering Australia. The Act facilitates the application for and the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, thereby enabling the imposition of a lower rate of customs duty on qualifying goods. The instrument specifically applies to submersible water pumps, where the CEO determined that no substitutable goods were produced in Australia at the time of the application, meeting the core criteria outlined in section 269C of the Act. This decision to grant the concession is made under section 269P(3) and is applicable nationally, affecting the rights and obligations of importers within the Commonwealth of Australia. The TCO does not impose any new liabilities or disadvantages to persons other than the Commonwealth, and it preserves the rights of importers by allowing them to apply for a refund of duties paid on the goods since the effective date of the TCO, which is the date the application was lodged. The Act's reach is thus confined to the specific goods mentioned in the TCO, and the instrument does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0615762 under the Customs Act 1901 include sections 269C, 269F, and 269P. Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C (1) sets out the core criteria that an application must meet for a TCO to be granted. Specifically, it requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P (3) mandates that the CEO must make a written TCO. This order declares that the goods specified in the application are subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, applicants must ensure their submissions meet the core criteria specified in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the date the application was lodged. The CEO, on receiving an application, is required under section 269K (1) to publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made. The CEO must consider any submissions received but, in this instance, no submissions were lodged. Once the CEO is satisfied that the application meets the criteria, they must issue a TCO under section 269P (3). This TCO must specify the prescribed duty rate as per Schedule 4 of the Customs Tariff Act 1995.
The Act also outlines the potential consequences for breaches of its provisions. Although the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 generally may lead to criminal and civil penalties. For instance, knowingly making a false statement in a customs document could result in fines or imprisonment under section 238 of the Act. The maximum penalty for such an offence is generally a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, the Act may impose administrative penalties for non-compliance with its requirements, such as fines for late or incorrect declarations. The specific penalties can vary depending on the nature and severity of the breach, but they are designed to enforce compliance and ensure the proper application of tariff concessions.