EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717218
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 surface aerator gearboxes on 9 October 2007.
Instrument
TCO No 0717218 was made on 21 December 2007. It declares that those certain surface aerator gearboxes 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. 0717218 is taken to have come into force on 9 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 Parliament of Australia and is administered by the Chief Executive Officer of Customs. It provides a framework for the imposition of tariffs on imported goods. The Act was introduced to address the need for a structured approach to managing customs duties, ensuring compliance with international trade agreements, and facilitating the efficient flow of goods across borders. One of the key mechanisms within the Act is the ability to issue Tariff Concession Orders (TCOs) to provide relief from customs duties on certain goods. The objective of the TCOs is to ensure that Australian businesses and consumers can access goods at reduced costs, provided that no substitutable goods are produced in Australia. The instrument F2008L00115, known as Tariff Concession Instrument No. 0717218, was introduced to provide a tariff concession for certain surface aerator gearboxes, reducing the duty from 5% to 0% and reflecting the policy objective of supporting the efficient operation of water utilities in Australia.
Scope and Application
The Customs Act 1901 applies to individuals and entities who engage in the importation of goods, as well as to the entities that produce goods in Australia. This Act is a Commonwealth statute, which means it has a national reach throughout Australia. The Act facilitates the application for Tariff Concession Orders (TCOs) by entities seeking a reduction in customs duty on specified goods, provided these goods are not listed in section 269SJ of the Act and meet the criteria outlined in sections 269C, 269B, 269D, and 269E. The Act also provides that the CEO must not make a TCO if substitutable goods are produced in Australia in the ordinary course of business. The application process includes a public notice in the Gazette, inviting submissions from interested parties, although in this case, no submissions were received. TCO No. 0717218 specifically applies to certain surface aerator gearboxes and took effect from 9 October 2007, the date the application was lodged. The TCO does not impose any new liabilities on individuals or entities and benefits importers by potentially allowing them to claim a refund of duties paid on these goods since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation are section 269F, which allows for the application of Tariff Concession Orders (TCOs) by individuals or entities to the Chief Executive Officer (CEO) of Customs, and section 269C, which outlines the core criteria for the CEO to consider in making a decision on the application. Specifically, section 269C states that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Once an application meets the core criteria, section 269P(3) mandates that the CEO must issue a written order declaring the goods in question as subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes certain obligations and requirements on both the applicant and the CEO. For the applicant, the primary requirement is to submit a valid application to the CEO for a TCO, ensuring that the application complies with the criteria set out in section 269C. This involves demonstrating that no substitutable goods were produced in Australia at the time of application. For the CEO, the obligations include reviewing the application to determine whether it meets the core criteria, consulting with relevant parties if necessary, and making a decision in writing. Once a TCO is made, the CEO must also ensure that a notice is published in the Gazette inviting any interested parties to submit submissions against the TCO.
In terms of consequences for breach, the Act does not explicitly outline criminal or civil penalties for failing to comply with its provisions. However, non-compliance with the requirements for applying for a TCO or acting contrary to the terms of a TCO could potentially lead to legal challenges or administrative penalties. For instance, if an entity were to import goods under false pretenses or without proper documentation, this could result in customs penalties, fines, or legal action under the broader framework of the Customs Act 1901 and associated regulations. Additionally, there could be implications under other relevant legislation if fraudulent activities are involved.