EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709012
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-Maxon Pty Ltd applied for a TCO in respect of certain sewage or wastewater treatment plant tank scraper flights on 13 June 2007.
Instrument
TCO No 0709012 was made on 31 August 2007. It declares that those certain sewage or wastewater treatment plant tank scraper flights 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. 0709012 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 Tariff Concession Instrument No. 0709012, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods, in this case, certain sewage or wastewater treatment plant tank scraper flights. This instrument was introduced to provide relief to Australian businesses by reducing customs duty on these goods, thus encouraging the import of necessary equipment that is not domestically produced. The instrument was created by the Chief Executive Officer of Customs in response to an application from Aquatec-Maxon Pty Ltd, following a thorough assessment to ensure that the application met the core criteria set out in the Act, particularly the absence of substitutable goods produced in Australia. The Tariff Concession Order was effective from the date the application was lodged, 13 June 2007, and the concession did not disadvantage existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0709012, made under the Customs Act 1901, applies to the specific goods detailed in the instrument, namely certain sewage or wastewater treatment plant tank scraper flights. The Act allows for the application of lower rates of customs duty on goods that are the subject of a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs, provided certain criteria are met. This legislation is applicable to entities or individuals who import these specified goods into Australia. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia, and it does not discriminate based on state or territory boundaries. The Act excludes goods listed in section 269SJ of the Customs Act 1901 from the scope of TCOs. The instrument extends the application of the Act by specifying that the tariff concession applies to the identified sewage or wastewater treatment plant tank scraper flights, altering their duty from the general rate of 10% to free. This change takes effect from the date the application for the TCO was lodged, which in this case was 13 June 2007.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0709012 include sections 269C, 269F, 269P(3), 269K(1), and 269S of the Customs Act 1901, which collectively establish the framework for the application and implementation of Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, outlined in section 269C, they must make a written order, known as a TCO, which specifies the lower rate of customs duty that applies to the goods (sections 269P(3) and 269S). The CEO is required to publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted (section 269K(1)). The TCO then comes into force on the date the application was lodged (section 269S(1)).
The Customs Act 1901 imposes specific obligations on the CEO when processing TCO applications. Firstly, the CEO must ensure that the application is not in respect of goods that cannot be subject to a TCO, as specified in section 269SJ. If the application is valid, the CEO must then determine whether it meets the core criteria set out 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. If these criteria are met, the CEO must issue a written TCO. Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission.
Failure to comply with the requirements and obligations set out in the Customs Act 1901 can lead to various consequences. While the Act does not explicitly outline specific offences or penalties for breach, it is understood that non-compliance with customs regulations can result in both civil and criminal penalties. For instance, under the Customs Act 1901, the maximum penalties for offences can include fines of up to $22,000 for individuals and $110,000 for bodies corporate, along with potential imprisonment terms. Additionally, any person who imports goods in a manner that contravenes the Act may face penalties, including the imposition of additional duties and interest on the value of the goods, as well as potential criminal prosecution.
The Tariff Concession Instrument No. 0709012 specifies that certain sewage or wastewater treatment plant tank scraper flights are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This means that these goods are subject to a lower rate of customs duty, which is free of charge, provided that the CEO is satisfied that no substitutable goods were produced in Australia. This concession benefits importers by allowing them to apply for a refund of duty on goods imported since the day the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.