EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913562
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.
Christopher Contracting applied for a TCO in respect of certain thermal bio waste effuluent decontamination plant on 23 April 2009.
Instrument
TCO No 0913562 was made on 17 July 2009. It declares that those certain thermal bio waste effuluent decontamination 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. 0913562 is taken to have come into force on 23 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 Tariff Concession Instrument No. 0913562, enacted under the Customs Act 1901, was introduced to address the issue of applying tariff concessions to specific imported goods. The instrument was developed to facilitate the reduction or elimination of customs duty on goods that are not produced domestically, thereby encouraging importation and potentially stimulating economic activity. This instrument was enacted by the Chief Executive Officer of Customs, as authorised by the Customs Act 1901, to ensure that certain goods, such as the thermal bio waste effluent decontamination plant in this case, receive tariff benefits when no suitable Australian-made alternatives exist. The overarching policy objective is to foster trade efficiency and economic competitiveness by ensuring that importers are not unduly burdened with high customs duties on goods that are not locally produced.
Scope and Application
The Customs Act 1901 applies to any person or entity that imports goods into Australia and seeks a tariff concession under the Act's provisions. Specifically, the Act governs the process through which the Chief Executive Officer of Customs (CEO) may grant Tariff Concession Orders (TCOs), which provide for a lower rate of customs duty on specified goods. This legislation is applicable across Australia, as it is a Commonwealth Act. It is pertinent to note that the Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ. The application of the Act can be further defined and extended through subordinate instruments, which may include regulations or other legislative instruments that provide further detail on the criteria for TCOs, the process for applications, and the rights and obligations of those affected by the TCOs. The scope of the Act is confined to customs duty concessions and does not extend to other areas of taxation or trade regulation.
Key Provisions
The main operative sections of this legislation pertain to the process for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C specifies that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Subsection 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order, i.e., a TCO. The relevant sections of the Customs Tariff Act 1995 are also referenced, particularly Schedule 4, which provides the duty rates applicable to the goods in question.
The obligations imposed by the Act on the parties involved are primarily centred around the application and assessment process for TCOs. The CEO must assess whether an application meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the application is deemed valid, the CEO is required to make a TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be made. This process ensures transparency and allows for stakeholder input before a TCO is issued.
The legislation outlines specific consequences for breaches, although the explanatory statement does not detail penalties or specific offences. Typically, under the Customs Act 1901, breaches of the provisions could lead to civil or criminal penalties, including fines or imprisonment, depending on the severity of the breach. The exact penalties would be determined in accordance with the relevant sections of the Act and any subsidiary legislation. The focus here is on ensuring compliance with the application and assessment process for TCOs, and any failure to adhere to these obligations could result in enforcement actions.
In summary, the Act provides a clear framework for the application and issuance of Tariff Concession Orders, with specific obligations placed on the CEO to ensure applications meet the core criteria and are assessed fairly. The process is designed to be transparent, with an opportunity for stakeholder input. While the explanatory statement does not detail specific penalties, breaches of the Act could lead to significant civil or criminal consequences.