EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905077
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 pipe conveyors on 11 May 2009.
Instrument
TCO No 0905077 was made on 11 May 2009. It declares that those certain pipe conveyors 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. 0905077 is taken to have come into force on 13 February 2009.
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 was enacted to provide a framework for the regulation of customs and excise, including the imposition of duties on imported goods. The Act was introduced to address the need for a comprehensive legislative structure governing the collection of customs duties and the regulation of imports and exports in Australia. Part XVA of the Act specifically provides for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for the application of a lower rate of customs duty on certain goods. The Tariff Concession Instrument No. 0905077, introduced by the relevant legislature, aims to facilitate this process by establishing a mechanism for the concession of tariffs on specified goods, subject to certain criteria. The policy objective is to ensure that customs duty concessions are granted in circumstances where no substitutable goods are produced in Australia, thereby benefiting importers without imposing additional liabilities on them.
Scope and Application
The Tariff Concession Instrument No. 0905077 under the Customs Act 1901 applies to any entity or individual seeking a tariff concession order (TCO) for specific goods, ensuring that these goods benefit from a lower rate of customs duty as stipulated by the Act. This instrument was specifically applied to certain pipe conveyors, granted by the Chief Executive Officer of Customs (CEO) upon the application of Water Corporation on 11 May 2009. The application process requires the CEO to assess whether the goods in question meet the core criteria, primarily by determining if there are no substitutable goods produced in Australia at the time of application. If the CEO determines that the application meets these criteria, a TCO is issued, effectively applying a zero rate of duty to the specified goods, as opposed to the general rate of 5% applicable under the Customs Tariff Act 1995. The instrument’s jurisdictional reach is federal, applying across the Commonwealth of Australia, and it does not disadvantage any person other than the Commonwealth nor impose any liabilities on any person.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) that are relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, 269SJ, and 269K. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, and that the goods are not prohibited under section 269SJ, the CEO must make a written order (the TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K(1). A TCO comes into force on the day the application was lodged, as stated in section 269S(1).
The Act imposes several obligations on the parties involved. An applicant must submit a valid TCO application to the CEO, ensuring it is not for goods specified in section 269SJ of the Act. The CEO, upon receiving an application, must determine whether it meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged, as defined in sections 269B, 269C, 269D, and 269E. If the application meets the criteria, the CEO must publish a notice in the Gazette and make a written TCO if satisfied. The CEO is also responsible for ensuring that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and that no liabilities are imposed on them in respect of actions taken before the TCO's registration date.
Failure to comply with the provisions of the Customs Act 1901 may result in various penalties. However, the explanatory statement does not specify the exact penalties for breaches of the TCO provisions. Generally, breaches of customs laws can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the offence. The exact penalties would be determined by the courts based on the specific circumstances of the breach and applicable laws.
In summary, the Customs Act 1901 sets out the framework for the creation of Tariff Concession Orders, allowing for reduced customs duties on certain goods under specific conditions. The Act imposes obligations on applicants and the CEO, including the requirement for the CEO to assess applications and make orders if the criteria are met. While the explanatory statement does not detail specific penalties for breaches, general customs law penalties may apply.