EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718893
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 wastewater treatment plant on 7 November 2007.
Instrument
TCO No 0718893 was made on 29 January 2008. It declares that those certain wastewater treatment 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. 0718893 is taken to have come into force on 7 November 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, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and the regulation of imported and exported goods. A notable feature of the Act is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods. This mechanism was introduced to address economic and policy needs by facilitating the import of goods that are either not produced domestically or are not readily available in the Australian market, thereby encouraging competition and providing consumers with access to a broader range of products at potentially reduced costs. The policy objective of this scheme is to support industry development and consumer choice by making specific goods more affordable. The Customs Act 1901, through its provisions for TCOs, aims to balance the need for tariff revenue with the broader economic benefits of allowing duty-free or reduced-duty imports under certain conditions.
Scope and Application
The Tariff Concession Instrument No. 0718893, made under the Customs Act 1901, applies to goods specified in the instrument, in this case, certain wastewater treatment plants, and is intended to provide relief from customs duties for these goods. The instrument is applicable to Water Corporation, the entity that applied for the concession, and potentially to any other importers of similar goods who seek to benefit from the reduced duty rates. The geographical reach of this legislation is national, given that it pertains to customs duties which are a federal matter in Australia. The instrument was made effective from 7 November 2007, the date on which the application was lodged, and it is contingent upon the core criteria outlined in the Customs Act 1901 being met, such as the absence of substitutable goods produced in Australia. Any exclusions or limitations are those specified in section 269SJ of the Act, which details goods that cannot be subject to a Tariff Concession Order. The instrument can be extended or restricted through subordinate instruments, as allowed by the Customs Act 1901.
Key Provisions
The key operative sections of this legislation (F2008L00345) are sections 269C, 269F, 269K(1), 269P(3), and 269S(1) of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application meets the core criteria specified in section 269C, and no substitutable goods are produced in Australia, the CEO must make a written order declaring the goods subject to the TCO (section 269P(3)). This order becomes effective on the day the application was lodged (section 269S(1)). Once an application is accepted, the CEO must publish a notice in the Gazette inviting submissions on the application (section 269K(1)). This TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person.
The obligations and requirements imposed by the Act on the parties or entities it governs include ensuring that any application for a TCO is made in accordance with section 269F. The CEO must evaluate the application to determine whether it meets the core criteria outlined in section 269C. If the application satisfies these criteria and no substitutable goods are produced in Australia, the CEO must issue a TCO as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on the application (section 269K(1)). The TCO itself does not impose any liabilities on any person and does not disadvantage any person other than the Commonwealth.
In terms of potential breaches and associated consequences, the Customs Act 1901 does not explicitly outline specific offences or penalties within the text of this legislation. However, general provisions within the Customs Act and related regulations could apply to any non-compliance with the Act. These might include administrative penalties for incorrect declarations, fraudulent claims, or failure to comply with customs procedures. The severity of penalties would depend on the nature and extent of the breach, with potential civil or criminal sanctions available under broader customs legislation.
Under this legislation, the TCO itself does not create any new offences or penalties. However, any misuse of the TCO or non-compliance with customs requirements could result in penalties under the broader Customs Act 1901. For example, section 136 of the Act provides for penalties for making false statements or representations in relation to customs matters, with potential fines and imprisonment. Similarly, section 140 of the Act outlines penalties for contravening customs laws, which could include fines or imprisonment depending on the severity of the breach. The specific penalties for any breach would be determined by the applicable sections of the Customs Act 1901 and any relevant regulations.