EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913734
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 chlorination plant on 23 April 2009.
Instrument
TCO No 0913734 was made on 10 July 2009. It declares that those certain chlorination 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. 0913734 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. 0913734, enacted under the Customs Act 1901, addresses the need to provide tariff concessions on certain goods that are not produced domestically. This instrument allows for a lower rate of customs duty on specific goods by the Chief Executive Officer of Customs, provided that no substitutable goods are produced in Australia. The instrument was introduced to facilitate the importation of goods that are essential but not manufactured locally, thereby supporting economic activities and trade. The instrument was published in the Gazette to invite any objections to the concession, though none were received. The policy objective is to ensure that the importation of these specific goods is not unduly hindered by high tariffs, thus promoting economic efficiency and the availability of necessary products.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the application and scope of Tariff Concession Orders (TCOs) that the Chief Executive Officer of Customs may issue. The Act applies to applications made by individuals or entities seeking a reduction in customs duty on specified goods, provided that the goods are not listed under section 269SJ, which includes certain prohibited goods. The TCO mechanism is designed to provide duty relief when the goods in question are not produced domestically in the ordinary course of business, as outlined in sections 269C and 269D of the Act. For instance, the explanatory statement details how Tiwest Pty Ltd successfully applied for a TCO on certain chlorination plant, resulting in a reduction of the duty rate from 5% to free, effective from the date the application was lodged. This TCO, number 0913734, was made on 10 July 2009, and it is applicable nationally across Australia. Notably, the Act ensures that the TCO does not disadvantage any person or impose new liabilities, preserving the rights of importers who can apply for duty refunds on imports since the TCO's effective date. The application of the TCO is further regulated and potentially extended through subordinate instruments, ensuring flexibility and responsiveness to specific economic or policy needs.
Key Provisions
The Tariff Concession Order No. 0913734, made under section 269F of the Customs Act 1901, applies to certain chlorination plant and sets a tariff concession that reduces the duty on these goods from the general rate of 5% to free. The CEO must decide whether an application for a TCO meets the core criteria as outlined in section 269C, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged, as defined by section 269D (subsection 269P(3)). Once the CEO is satisfied that the application meets these criteria, a written TCO is issued, specifying that the goods are subject to a particular item in the Customs Tariff Act 1995.
For parties governed by this TCO, such as importers of the specified chlorination plant, the key obligation is to ensure that the goods are correctly classified under the terms of the TCO. Importers must be aware of the concession and may apply for a refund of duty on goods imported since the TCO came into effect on 23 April 2009, as per the Regulations. The TCO explicitly states that it does not affect the rights of any person, except to the benefit of importers, and does not impose any new liabilities on any person.
Under the Customs Act 1901, failure to comply with the requirements of a Tariff Concession Order could lead to various consequences. While the explanatory statement does not specify offences or penalties directly related to breaches of this particular TCO, general provisions in the Act and associated regulations may apply. Penalties for non-compliance with customs regulations can include fines and, in severe cases, imprisonment. The exact penalties would depend on the specific breach and could range from fines up to a certain amount to imprisonment for a defined period. It is essential for entities involved to adhere to the terms of the TCO to avoid any potential civil or criminal repercussions.