EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721804
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 effluent sludge dewatering plant on 20 December 2007.
Instrument
TCO No 0721804 was made on 14 March 2008. It declares that those certain effluent sludge dewatering 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. 0721804 is taken to have come into force on 20 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. 0721804, enacted under the Customs Act 1901, addresses the need for a streamlined process to provide tariff concessions for specific goods, thereby facilitating trade and economic efficiency. This instrument was introduced to allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods, applying lower rates of customs duty when certain criteria are met. The policy objective behind this legislative action is to support Australian businesses by reducing the cost of imported goods, provided that these goods are not being produced domestically and there are no suitable substitutes available in Australia. The instrument was developed following an application from the Water Corporation for a tariff concession on certain effluent sludge dewatering plant, reflecting the broader intent to ease import duties for goods that are crucial for industry but not manufactured locally.
Scope and Application
The Tariff Concession Instrument No. 0721804 under the Customs Act 1901 applies to the specific goods, namely certain effluent sludge dewatering plant, as requested by the Water Corporation. The Act facilitates the granting of tariff concessions through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs, provided certain criteria are met. This particular instrument was enacted to lower the customs duty on these specific goods from the general rate of 5% to free, based on the determination that no substitutable goods were produced in Australia. The application and subsequent order are made under section 269F of the Act and are effective from the date the application was lodged, 20 December 2007, in accordance with subsection 269S(1). The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities. Importers stand to benefit from this order by being eligible for a refund of duty paid on these goods since the effective date of the concession. The instrument operates on a national level, impacting all importers and entities involved in the importation of these goods across Australia.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0721804 under the Customs Act 1901 (the Act) include sections 269C, 269P, and 269S. Section 269C establishes the core criteria for a Tariff Concession Order (TCO) application, requiring that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that a TCO application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S stipulates that a TCO is considered to have come into force on the day the application for the TCO was lodged. In this case, TCO No. 0721804, made on 14 March 2008, declares that certain effluent sludge dewatering plant are goods to which item 50 of Schedule 4 to the Tariff applies, with a general duty rate of 5% reduced to free duty.
The obligations imposed by the Act on the parties governed by it include the requirement for applicants to ensure that their applications for TCOs meet the core criteria specified in section 269C. The CEO has the duty to decide whether an application meets these criteria and to make a written order if satisfied, as outlined in section 269P. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). Additionally, the CEO is responsible for ensuring that TCOs do not disadvantage or impose liabilities on persons other than the Commonwealth for actions taken before the TCO's registration, as stated in subsection 269S(1).
Under the Act, any breach of the obligations or requirements can result in various consequences. Although specific offences and penalties are not detailed in the Explanatory Statement, breaches of customs regulations generally can lead to both civil and criminal penalties. Civil penalties might include fines, whereas criminal penalties could involve imprisonment, depending on the severity of the breach. The maximum penalties for breaches would be outlined in the relevant sections of the Customs Act 1901 and associated regulations. Importers, however, may benefit from the TCO by applying for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.