EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719753
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 Pty Ltd applied for a TCO in respect of certain wastewater preliminary treatment plant on 20 November 2007.
Instrument
TCO No 0719753 was made on 1 February 2008. It declares that those certain wastewater preliminary 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. 0719753 is taken to have come into force on 20 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 peron 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, provides a framework for the application of customs duties on imported goods. One of the key features of this Act is the provision for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs to reduce the rate of customs duty on specified goods. This mechanism was introduced to address the problem of ensuring that certain goods that cannot be produced in Australia are subject to a concessional rate of duty, thereby promoting efficiency and economic benefit. The policy objective is to ensure that the application of customs duties does not unduly burden the importation of goods that are not locally produced and that importers benefit from reduced duty rates. On 1 February 2008, Tariff Concession Instrument No. 0719753 was enacted, providing a zero rate of duty for certain wastewater preliminary treatment plant, following a successful application by Water Corporation Pty Ltd, as no substitutable goods were produced in Australia. This initiative ensures that the importation of such critical infrastructure components is facilitated without the financial burden of customs duties.
Scope and Application
The Tariff Concession Instrument No. 0719753 applies to certain wastewater preliminary treatment plants and is enacted under the Customs Act 1901. The legislation is relevant to entities such as Water Corporation Pty Ltd that apply for tariff concessions on specific goods, provided the goods are not excluded under section 269SJ of the Act. The instrument specifies that these wastewater treatment plants are to be subject to a zero rate of customs duty, as per the prescribed item in Schedule 4 of the Customs Tariff Act 1995, which contrasts with the usual 5% duty rate. This concession is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia, thereby meeting the core criteria as outlined in section 269C of the Act. The instrument also outlines that the concession is effective from the date the application was lodged, 20 November 2007, and does not retroactively affect any rights or impose liabilities on entities other than the Commonwealth.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0719753, which was made under the Customs Act 1901, establish the conditions under which a Tariff Concession Order (TCO) can be issued by the Chief Executive Officer of Customs (CEO). Specifically, section 269F allows for applications to the CEO for a TCO in respect of goods, provided these goods are not those specified in section 269SJ. A TCO application meets the core criteria under section 269C if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO is required to make a written order if satisfied that the application meets these criteria. For the purposes of these sections, 'substitutable goods' are defined in section 269D as goods produced in Australia that are put, or capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put.
The obligations imposed by this Act on the parties involved are primarily on the CEO, who must assess whether an application for a TCO meets the specified core criteria. Upon determining that an application meets these criteria, the CEO must issue a TCO. Additionally, upon receiving a valid TCO application, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions opposing the TCO. These obligations ensure transparency and due process in the TCO application and issuance process. The CEO’s role is crucial in ensuring that TCOs are granted only when appropriate, maintaining the integrity of the customs duty scheme.
Failure to comply with the provisions of the Customs Act 1901 in relation to TCOs may lead to various legal consequences. Although the specific penalties for breach are not detailed within the explanatory statement, breaches of customs legislation generally carry significant penalties under Australian law. For instance, offences under the Customs Act can result in both civil and criminal penalties, including fines and imprisonment. The precise penalties would depend on the nature and severity of the breach, but they are designed to ensure compliance with the statutory requirements governing TCOs and customs duties.
Tariff Concession Instrument No. 0719753, which was made on 1 February 2008, applies to certain wastewater preliminary treatment plants, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that the general rate of duty on these goods, which is 5%, is reduced to free under the TCO. The instrument came into force on 20 November 2007, the date on which the application was lodged, as stipulated in subsection 269S(1). Importantly, the TCO does not affect the rights of any person as at the date of registration to their disadvantage, nor does it impose any liabilities on any person for actions taken prior to the registration date. This ensures that the rights of importers are protected, and they can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.