EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913315
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.
Tiwest Pty Ltd applied for a TCO in respect of certain water treatment and supply plant on 22 April 2009.
Instrument
TCO No 0913315 was made on 10 July 2009. It declares that those certain water treatment and supply 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. 0913315 is taken to have come into force on 22 April 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, enacted by the Commonwealth Parliament, established a framework under which the Chief Executive Officer of Customs could issue Tariff Concession Orders (TCOs) to lower customs duty rates on certain goods. This legislation aimed to address the issue of ensuring that Australian industries remain competitive by providing tariff relief on goods that cannot be produced domestically. Instrument TCO No. 0913315, made under this Act, pertains specifically to certain water treatment and supply plants, reducing the duty rate from 5% to free, provided no substitutable goods are produced in Australia. The decision to grant this concession followed an application by Tiwest Pty Ltd and the absence of any objections after a notice was published in the Gazette. The policy objective here is to support industries unable to compete domestically by lowering import duties on specific goods, thereby enhancing their competitiveness without imposing new liabilities on other parties.
Scope and Application
The Tariff Concession Instrument No. 0913315 under the Customs Act 1901 applies to specific water treatment and supply plant goods, which are declared as items covered under item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument was made following an application by Tiwest Pty Ltd on 22 April 2009, and it became effective from the same date. The instrument applies to the CEO of Customs and importers of the specified goods, and it provides a concession by setting the customs duty rate at free, down from the general rate of 5%. The legislation operates within the Commonwealth jurisdiction and applies nationally. The application process for such tariff concessions requires compliance with the core criteria stipulated in the Customs Act, ensuring that no substitutable goods are produced in Australia, as defined by sections 269D, 269E and 269F of the Act. The Act also mandates that the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. The instrument does not disadvantage any person and does not impose any new liabilities, but it does allow for a refund of duty for importers of these goods from the date the TCO is taken to have come into force.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0913315, which pertains to the Customs Act 1901, involve the application for and issuance of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). A TCO can be applied for by a person under section 269F, and if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria set out in section 269C, a written order will be issued. This order declares that the specified goods will be subject to a lower rate of customs duty, in this case, a rate of free duty (section 269P(3)). The core criteria in section 269C require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined in section 269D, ordinary course of business in section 269E, and the process of meeting the core criteria is further elaborated in section 269B.
The Act imposes certain obligations on both the applicant and the CEO. For the applicant, it is necessary to ensure that the application is not in respect of goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The CEO, on receiving a valid application, must then determine whether it meets the core criteria by assessing whether substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to this invitation.
Failing to adhere to the requirements set out in the Act can result in various consequences. For example, if the CEO does not follow the stipulated process for issuing a TCO when the core criteria are met, it could lead to non-compliance with the Act. Conversely, if an applicant submits an application for goods that are ineligible under section 269SJ, this could result in the application being rejected. There are no specific offences outlined in the explanatory statement, but non-compliance with the Act could potentially lead to legal challenges or disputes regarding the validity of a TCO. The penalties for any breaches of the Act would be determined by the relevant provisions of the Customs Act 1901 and associated regulations, which are not detailed in the explanatory statement.