EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705110
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.
Grundfos Pumps Pty Ltd applied for a TCO in respect of certain centrifugal pumps on 4 April 2007.
Instrument
TCO No 0705110 was made on 22 June 2007. It declares that those certain centrifugal 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 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. 0705110 is taken to have come into force on 4 April 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, through its Tariff Concession Orders scheme, facilitates tariff reductions on specific imported goods, enhancing competitiveness and efficiency in the Australian market. Enacted by the Parliament of Australia, this legislation aims to address economic inefficiencies by allowing for lower customs duties on goods for which no substitutable products are produced domestically. This policy objective supports Australian industries by ensuring that imported goods are competitively priced, which can bolster trade and investment. The Tariff Concession Instrument No. 0705110, made on 22 June 2007, exemplifies this legislative intent by granting a tariff concession on certain centrifugal pumps, thereby reducing their customs duty from 5% to 0%. The instrument, which came into force on 4 April 2007, was implemented after the Chief Executive Officer of Customs confirmed that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for Tariff Concession Orders (TCOs) which are designed to provide relief on customs duty rates for certain goods. This Act applies to any person or entity that seeks to apply for a TCO for goods they intend to import, provided these goods do not fall under the list of ineligible items specified in section 269SJ. The application must meet core criteria outlined in sections 269C, 269D, and 269E, which include the condition that no substitutable goods are being produced in Australia at the time of the application. The Chief Executive Officer of Customs is responsible for assessing and deciding on the validity of TCO applications. If a TCO is granted, it applies retroactively from the date the application was lodged, offering relief on customs duties and potentially allowing for duty refunds on previously imported goods under certain conditions. This legislation has a national jurisdictional reach within Australia, and while it primarily impacts importers, it does not disadvantage or impose liabilities on any person other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0705110 (F2007L02162) under the Customs Act 1901 (section 269F) concern the creation of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning particular goods. If the CEO determines that the application is valid and meets the core criteria as set out in section 269C, a TCO can be issued. This instrument, TCO No. 0705110, was made on 22 June 2007 and applies to certain centrifugal pumps. The core criteria for issuing a TCO, as outlined in section 269C, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by this Act on the parties and entities it governs include the requirement for the CEO to assess applications for TCOs and ensure that they meet the core criteria (section 269C). Once the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to the prescribed tariff concession. The CEO is also required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received in response to the published notice. Furthermore, section 269S(1) stipulates that a TCO is considered to come into force on the day the application for the TCO was lodged, which, for TCO No. 0705110, is 4 April 2007.
Failure to comply with the provisions of the Customs Act 1901 and the associated TCO regulations can lead to several consequences. The Act does not specify particular offences or penalties for breaches related to the issuance or non-issuance of a TCO. However, general penalties for non-compliance with the Customs Act can include fines or imprisonment, depending on the severity of the breach. The specific penalties would be determined in the context of broader customs legislation and the particular circumstances of the breach. For instance, if an entity were found to have imported goods without adhering to the terms of the TCO, they could face financial penalties or other administrative consequences as outlined in the Customs Act and related regulations.
In summary, the Tariff Concession Instrument No. 0705110 establishes the legal framework for issuing TCOs under the Customs Act 1901, focusing on the assessment and approval process by the CEO. It imposes specific obligations on the CEO to evaluate applications and ensure compliance with the core criteria. While the Act does not explicitly outline penalties for breaches of the TCO provisions, general penalties for non-compliance with the Customs Act can include fines and imprisonment, depending on the nature and severity of the breach.