EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918884
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.
Pentair Water Australia applied for a TCO in respect of certain cold water tanks on 04 June 2009.
Instrument
TCO No 0918884 was made on 28 August 2009. It declares that those certain cold water tanks 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. 0918884 is taken to have come into force on 04 June 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. 0918884 was enacted in 2009 as part of the Customs Act 1901 to provide a tariff concession for certain cold water tanks imported into Australia. This legislation was introduced to address the need for concessional tariffs on specific goods that are not produced domestically or have suitable substitutes available in the Australian market. The Tariff Concession Orders (TCO) scheme, established under Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to reduce customs duty on goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. In this case, Pentair Water Australia applied for and was granted a TCO for certain cold water tanks, resulting in a reduction of duty from the general rate of 5% to free. The process involved public consultation, with no objections received, and the concession came into effect on the date of application lodging, 04 June 2009. The policy objective of this measure is to facilitate the import of specific goods that are not domestically produced, thereby supporting market access and potentially lowering costs for consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) through the authority of the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking tariff concessions for specific goods that are not produced in Australia in the ordinary course of business. The Act's jurisdictional reach is federal, applying across the Commonwealth of Australia. The scope of the Act is further delineated by exclusions, such as goods specified in section 269SJ, which are ineligible for TCOs. The Act also allows for the extension or restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the duty rates and applicable goods under Schedule 4. For instance, TCO No. 0918884, made in respect of certain cold water tanks, exemplifies the application of the Act, where the duty rate was reduced from 5% to free, contingent upon the CEO's satisfaction that no substitutable goods were produced domestically.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer (CEO) of Customs can reduce customs duty rates on certain goods. Section 269F allows a person to apply to the CEO for a TCO if the goods in question are not specified in section 269SJ, which lists goods that are ineligible for TCOs. The CEO's decision to grant a TCO hinges on whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged.
The obligations under the Act necessitate that the CEO must, upon receiving a valid TCO application, publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. In the case of TCO No. 0918884, which was applied for by Pentair Water Australia for certain cold water tanks, the CEO determined that the application met the core criteria because no substitutable goods were being produced in Australia. As a result, the CEO issued a written order making these goods subject to a 0% customs duty rate instead of the general 5% rate, effective from the date the application was lodged.
Failure to comply with the requirements set out in the Customs Act 1901 could result in civil or criminal penalties. Although the specific penalties for non-compliance with TCO regulations are not detailed in the provided text, general provisions within the Act may include fines or imprisonment for breaches of customs regulations. The severity of penalties could depend on the nature and extent of the breach, and it would be within the purview of the relevant authorities to determine the appropriate sanctions.
TCO No. 0918884, which came into effect on 04 June 2009, does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person for actions taken before the date of registration. Importers of the specified goods will benefit from the reduced duty rates and may apply for a refund of duty paid on imports since the effective date of the TCO. This concession is designed to provide economic relief and encourage the importation of these goods by reducing the financial burden on importers.