EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709010
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.
Aquatec-Maxcon Pty Ltd applied for a TCO in respect of certain sewage or wastewater treatment scrapers on 13 June 2007.
Instrument
TCO No 0709010 was made on 31 August 2007. It declares that those certain sewage or wastewater treatment scrapers 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 10%. 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. 0709010 is taken to have come into force on 13 June 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 provide a framework for the administration of customs and excise duties in Australia, and includes provisions for tariff concession orders (TCOs) to lower the rate of customs duty on certain goods. The Tariff Concession Instrument No. 0709010, made under the authority of the Customs Act 1901, aims to address the specific need for tariff concessions on certain sewage or wastewater treatment scrapers by granting a concession to Aquatec-Maxcon Pty Ltd, which applied for this tariff reduction on 13 June 2007. The instrument was enacted by the Chief Executive Officer of Customs, who found that no substitutable goods were produced in Australia, thereby meeting the core criteria under the Act. This concession effectively reduces the duty on these goods from the general rate of 10% to free, providing a beneficial impact on the rights of importers who may apply for duty refunds for imports since the concession came into effect on 13 June 2007.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCO) that provide for lower rates of customs duty on certain goods. This Act applies to any person or entity seeking to import goods that qualify for a TCO, provided that such goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The Act also applies to the Chief Executive Officer of Customs (CEO) who has the authority to decide whether to make a TCO based on the core criteria outlined in the Act. The geographic and jurisdictional reach of this Act is national, applying across the Commonwealth of Australia. Any exclusions from TCOs are specified in section 269SJ of the Act. The CEO's decision-making power regarding TCOs can be extended or restricted by subordinate instruments, although no such instruments are mentioned in the provided explanatory statement. The commencement of the TCO is effective from the date the application is lodged, as stipulated in subsection 269S(1) of the Act.
Key Provisions
The Customs Act 1901 (the Act) establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO) (s 269F). This process allows for a lower rate of customs duty to be applied to goods specified in a TCO. The application for a TCO can be submitted by any person, provided that the goods in question are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must then assess whether the application meets the core criteria, as outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations under the Act require the CEO to ensure that a TCO application complies with the core criteria. If the CEO is satisfied that the application meets these criteria, they must issue a written order that specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) applies (s 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (s 269K(1)). In the case of TCO No. 0709010, Aquatec-Maxcon Pty Ltd applied for a concession on certain sewage or wastewater treatment scrapers on 13 June 2007, and the CEO issued the order on 31 August 2007, declaring these goods to be subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, down from the general rate of 10%.
Failure to comply with the requirements of the Customs Act 1901 can result in various consequences, including the imposition of penalties. Section 287 of the Act allows for penalties to be imposed for offences under the Act, including fines up to a maximum of 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate, as well as potential imprisonment terms. In addition, section 288 provides for civil penalties, including fines up to 1,100 penalty units for individuals and 5,500 penalty units for bodies corporate, for breaches of the Act. These penalties are intended to ensure compliance and uphold the integrity of the customs duty system.