EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716916
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.
Water Corporation applied for a TCO in respect of certain soil and sand preparation plant on 5 October 2007.
Instrument
TCO No 0716916 was made on 14 December 2007. It declares that those certain soil and sand preparation plant 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. 0716916 is taken to have come into force on 5 October 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 by the Australian Parliament to regulate and manage the importation and exportation of goods within Australia. A key feature of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs (CEO) to grant tariff concessions on certain goods, effectively reducing or eliminating customs duty on them. This mechanism was introduced to address the gap in providing relief for businesses that import goods for which no Australian-produced substitutes exist, thereby promoting competitive imports and supporting economic efficiency.
Tariff Concession Instrument No. 0716916, made on 14 December 2007, is an example of such a concession, applying to certain soil and sand preparation plant as applied by the Water Corporation. The CEO determined that these goods are subject to a zero duty rate, rather than the general 5% duty, as no substitutable goods were produced in Australia at the time of the application. This instrument aligns with the policy objective of facilitating the importation of goods where there are no suitable domestic alternatives, thereby aiding industries that rely on such equipment. The instrument came into effect on the day the application was lodged, 5 October 2007, and does not affect any pre-existing rights or impose any liabilities.
Scope and Application
The Customs Act 1901, through its Part XVA, outlines the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals and entities seeking to import goods that are not produced in Australia in the ordinary course of business, allowing for a lower rate of customs duty. The scope of the Act encompasses any applicant who submits a valid TCO application, provided the goods in question do not fall under the exclusions specified in section 269SJ. The application of the Act is national, as it pertains to the Commonwealth level, and its effect is immediate upon the lodging of the application, as specified in section 269S(1). The Act does not disadvantage any person or impose liabilities for actions taken prior to the TCO's registration, ensuring that the rights of importers are protected and can benefit from duty refunds under the regulations. The TCOs may be further detailed or modified through subordinate instruments, extending the application of the primary legislation as necessary.
Key Provisions
The primary operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are sections 269F, 269C, 269B, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application meets the core criteria stipulated in section 269C, the CEO must decide whether to make the order. Section 269B defines key terms such as 'goods produced in Australia' and'substitutable goods', while section 269P outlines the conditions under which the CEO must make a written TCO if the application is deemed eligible.
Under these sections, the obligations on parties include ensuring that any TCO application adheres to the criteria outlined in the Act. Specifically, applicants must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The CEO has a duty to assess these applications and make a decision in accordance with the Act. If the application meets the core criteria, the CEO must issue a written TCO, effectively granting the tariff concession.
Breach of the requirements set forth in the Customs Act 1901 may result in civil or criminal consequences. The Act does not explicitly state penalties for non-compliance with TCO provisions, but general provisions under the Customs Act may apply. The CEO has the authority to impose fines and penalties for non-compliance with customs regulations. For example, under section 272, penalties for breaches can include fines and, in serious cases, imprisonment. The exact penalties depend on the nature and severity of the breach but can include significant financial penalties and potential criminal charges for more severe infractions.
The Customs Act 1901 also includes provisions for the CEO to publish notices in the Gazette and invite submissions from interested parties when considering a TCO application. This ensures transparency and allows stakeholders to voice any concerns or objections. Failure to comply with these procedural requirements could lead to legal challenges regarding the validity of the TCO. Additionally, while the TCO itself does not impose new liabilities on any person, it does affect the rights of importers, providing them with the opportunity to apply for a refund of duty on goods imported since the TCO came into force.