EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704673
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.
ABS Wastewater Technology Pty Ltd applied for a TCO in respect of certain submerged turbine aerators on 28 March 2007.
Instrument
TCO No 0704673 was made on 15 June 2007. It declares that those certain submerged turbine aerators 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. 0704673 is taken to have come into force on 28 March 2007.
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 to establish a framework for the regulation of customs duties and related matters in Australia. This Act, administered by the Parliament of Australia, aims to streamline the customs process and ensure fair trade practices by providing a structured approach to the application and implementation of tariff concession orders. Specifically, Part XVA of the Customs Act addresses the issue of providing tariff concessions to certain goods, thereby reducing the customs duty payable on them. Tariff Concession Order No. 0704673, made on 15 June 2007, applies to certain submerged turbine aerators, granting them a concession that reduces the general rate of duty from 5% to free, provided no substitutable goods were produced in Australia at the time of application. The policy objective is to support Australian industries by ensuring that tariff concessions are granted appropriately and efficiently, thereby facilitating smoother trade processes and protecting local production where applicable.
Scope and Application
The Customs Act 1901 applies to the regulation of customs duty through Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs (CEO). These orders provide for lower rates of customs duty on specific goods, subject to certain criteria. The Act applies to individuals or entities that apply for a TCO in respect of goods that are not specified as ineligible under section 269SJ of the Act. The CEO must determine whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The geographic reach of the Act is national, as it applies across Australia, with the CEO administering the concessions as per the Customs Tariff Act 1995. Exclusions from the concessions include goods specified in section 269SJ of the Act. The application of the Act may be extended or restricted through subordinate instruments, as indicated in the Explanatory Statement for Tariff Concession Instrument No. 0704673. This particular instrument, which came into force on 28 March 2007, granted a tariff concession on certain submerged turbine aerators, resulting in a duty rate of free, down from the general rate of 5%.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269P(3), and 269S) establish the process by which Tariff Concession Orders (TCO) can be made, and the circumstances in which these orders are effective. According to section 269C, an application for a TCO will meet the core criteria if the Chief Executive Officer (CEO) of Customs is satisfied 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 core criteria, section 269P(3) mandates that a TCO must be made, declaring that the goods in question are subject to a specified tariff concession. Section 269S stipulates that a TCO is taken to have come into force on the day the application was lodged, meaning that any rights of the parties involved will be affected as of that date.
The Act imposes several obligations on the parties it governs. Firstly, under section 269F, any person can apply to the CEO for a TCO in respect of goods, provided those goods are not specified in section 269SJ as ineligible for such concessions. The CEO must then determine whether the application meets the core criteria as outlined in section 269C. If the CEO is satisfied, they must make a TCO as per section 269P(3). Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO did not receive any submissions in response to the notice for TCO No. 0704673.
Breaching the conditions or failing to comply with the requirements set out in the Customs Act 1901 can result in civil or criminal penalties. While the specific offences and penalties are not detailed in the explanatory statement for TCO No. 0704673, breaches of the Customs Act generally can lead to substantial penalties. For example, under section 237 of the Act, a person who knowingly or recklessly makes a false statement or representation in an application for a TCO may face a penalty of up to five times the amount of duty that would have been payable if the statement had been true, or imprisonment for up to two years, or both. These penalties highlight the importance of accurate and truthful information when applying for a TCO.