EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0827609
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.
Aquatec Maxcon Group Pty Ltd applied for a TCO in respect of certain biogas desulphurization scrubber on 21 August 2008.
Instrument
TCO No 0827609 was made on 07 November 2008. It declares that those certain biogas desulphurization scrubber 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. 0827609 is taken to have come into force on 21 August 2008.
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. 0827609, enacted in 2008, is a legislative instrument under the Customs Act 1901, which facilitates the granting of tariff concessions to specific goods. This instrument was introduced to address the need for tariff reductions on particular imports, thereby encouraging trade and supporting industries that may lack domestic production alternatives. The instrument was created by the Chief Executive Officer of Customs, who is mandated by section 269F of the Act to consider applications for tariff concessions. The policy objective of this instrument, as outlined in the explanatory statement, is to ensure that imports of goods for which no substitutable Australian-made alternatives exist are not subject to prohibitive customs duties, thereby supporting economic efficiency and competitiveness. The instrument became effective on the date the application was lodged, 21 August 2008, and no submissions opposing the concession were received, indicating broad acceptance of the measure.
Scope and Application
The Tariff Concession Instrument No. 0827609 under the Customs Act 1901 applies to the biogas desulphurization scrubbers specified in the instrument, and its primary function is to provide tariff concessions on these goods. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to specified goods, provided certain criteria are met, including the absence of substitutable goods being produced in Australia. The instrument in question, which was made on 7 November 2008, declares that the specified biogas desulphurization scrubbers are subject to a free rate of duty, rather than the general rate of 5%. This applies nationally across Australia and benefits importers who can claim a refund of duty on these goods imported since the day the TCO was taken to have come into force, which is 21 August 2008. The instrument does not affect the rights of any person adversely or impose liabilities on anyone in respect of actions taken before the TCO was registered. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from interested parties, although in this case, no submissions were received.
Key Provisions
The main operative sections of the legislation pertain to the application and assessment of Tariff Concession Orders (TCOs) as outlined in the Customs Act 1901. Specifically, Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO is satisfied that the application pertains to goods that are not specified in Section 269SJ, which lists those goods that cannot be subject to a TCO, they must then assess whether the application meets the core criteria in Section 269C. This requires the CEO to determine if no substitutable goods were produced in Australia at the time of the application, as defined by Sections 269D and 269E. If the application meets the criteria, the CEO is required under Section 269P(3) to make a written order declaring that the goods are subject to a specified item in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must lodge a valid application with the CEO. The CEO is then obliged to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons why the TCO should not be made, as per Section 269K(1). The CEO must consider any such submissions and make a decision based on the application's compliance with the core criteria. Once a TCO is made, it comes into force on the day the application was lodged, as stated in Section 269S(1). Furthermore, the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901, particularly in relation to the application and assessment of TCOs, may result in various consequences. The Act does not explicitly outline specific offences or penalties for breaches related to TCOs. However, breaches of other sections within the Customs Act 1901 may attract penalties such as fines or imprisonment, depending on the severity of the offence. For instance, knowingly making a false statement in a customs document could result in a fine of up to $22,000 or imprisonment for up to two years, or both, as per Section 233A of the Act. Additionally, civil and criminal penalties may apply for breaches of customs regulations more broadly, including fines and imprisonment, with the specific penalties varying according to the nature and extent of the breach.