EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720626
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.
Alinta Energy Pty Ltd applied for a TCO in respect of certain water treatment plant on 03 December 2007.
Instrument
TCO No 0720626 was made on 29 February 2008. It declares that those certain water treatment plants 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. 0720626 is taken to have come into force on 03 December 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. 0720626 was enacted in 2008 under the Customs Act 1901, aiming to address the need for tariff concessions for specific imported goods. This instrument allows for a lower rate of customs duty on certain goods, as outlined by the Chief Executive Officer of Customs (CEO) in response to applications made under section 269F of the Act. The problem it sought to address was the lack of a structured mechanism for reducing customs duties on imported goods, which could otherwise hinder the competitiveness and availability of certain products in the Australian market. The instrument was created to provide a formal process for businesses to apply for tariff reductions where no substitutable goods are produced in Australia, thereby promoting economic efficiency and access to essential goods. The CEO, as the enacting body, ensures that the policy objective of facilitating trade and economic growth through targeted tariff reductions is met.
Scope and Application
The Tariff Concession Instrument No. 0720626 applies to certain water treatment plants and is governed under Part XVA of the Customs Act 1901. This instrument was enacted to provide tariff concessions for these specific goods, where a lower rate of customs duty is applied as opposed to the general rate. The application for such concessions is made by a person to the Chief Executive Officer of Customs, and the decision to grant the concession hinges on the absence of substitutable goods being produced in Australia on the date the application was lodged. The instrument explicitly excludes goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the application of customs duties as stipulated by the Customs Act 1901. Furthermore, the Tariff Concession Order does not affect the rights of any person as they stood on the date of the application, nor does it impose any new liabilities on any person. This order came into effect on the date the application was lodged, which in this instance was 03 December 2007.
Key Provisions
The main operative sections of the Customs Act 1901, relevant to Tariff Concession Orders (TCOs), include section 269F, which outlines the process for applying for a TCO, and section 269C, which sets out the core criteria that must be satisfied for the CEO to approve such an order. Section 269P(3) specifies the requirement for the CEO to issue a written TCO when the criteria are met. The TCO in question, No. 0720626, was issued on 29 February 2008, and it pertains to certain water treatment plants that will now attract a duty rate of free, down from the general rate of 5%, as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the parties by the Customs Act 1901 include the requirement for the CEO to evaluate TCO applications against the core criteria specified in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also ensure that any TCO application is not in respect of goods specified in section 269SJ, which are ineligible for tariff concessions. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as outlined in section 269K(1). Once the CEO decides to issue a TCO, the order is effective from the date the application was lodged, as stipulated in section 269S(1).
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline offences, penalties, or civil/criminal consequences for failing to comply with the provisions regarding TCOs. However, the Act does provide mechanisms for the CEO to manage and review TCO applications to ensure they meet the stipulated criteria. Non-compliance with the Act's provisions could potentially lead to legal challenges or administrative actions, but specific penalties are not detailed within the text of this particular TCO or the Customs Act 1901. The TCO itself, however, ensures that it does not disadvantage or impose liabilities on any person other than the Commonwealth, as per the Act's provisions.