EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918885
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.
Tenix Alliance Pty Ltd applied for a TCO in respect of certain wastewater preliminary treatment plant on 03 June 2009.
Instrument
TCO No 0918885 was made on 28 August 2009. It declares that those certain wastewater preliminary treatment 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. 0918885 is taken to have come into force on 03 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides the framework for administering customs duties and includes provisions for the creation of Tariff Concession Orders (TCOs). These TCOs allow for reduced customs duty rates on specified goods under certain conditions. The problem this legislation addresses is the potential economic disadvantage faced by Australian importers of goods for which no local substitute is produced, thereby encouraging local production and potentially fostering economic growth. The explanatory statement for Tariff Concession Instrument No. 0918885 outlines the process for making a TCO, detailing how the Chief Executive Officer of Customs assesses applications to ensure they meet the core criteria, which include the absence of substitutable goods produced in Australia. In the specific case of Tenix Alliance Pty Ltd, the application for a TCO concerning wastewater preliminary treatment plant was approved, resulting in a tariff concession that sets the duty rate at free, effectively benefiting importers of these goods by eliminating the previously applicable 5% duty.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking a reduction in customs duty on specific goods, provided these goods are not listed in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The application process involves an assessment by the CEO to determine whether the goods in question meet the core criteria, primarily ensuring that no substitutable goods are produced in Australia at the time of application. Once a TCO is issued, it applies to the specific goods outlined in the order, granting them a lower rate of duty as specified in the Customs Tariff Act 1995. The application and issuance of TCOs are governed by Commonwealth legislation, ensuring a uniform approach across Australia. Notably, TCOs do not retroactively affect any rights or liabilities of individuals or entities other than the Commonwealth, maintaining legal certainty for existing transactions.
Key Provisions
The primary operative sections of this legislation pertain to the making of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C sets out the core criteria that must be satisfied for an application to be valid, which includes the requirement that no substitutable goods are produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these core criteria, they must make a written order (section 269P(3)) declaring the goods to which the TCO applies. This particular TCO, No. 0918885, was made on 28 August 2009 for certain wastewater preliminary treatment plants, as the CEO determined that no substitutable goods were produced in Australia.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (section 269K(1)). The CEO is also required to consider any submissions received and decide whether the application meets the core criteria set out in section 269C. In this instance, the CEO did not receive any submissions in response to the published notice.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for the failure to comply with the Act's requirements. However, it is implied that any breach of the legislative framework might lead to legal repercussions, as with most statutory provisions. The penalties for non-compliance with customs legislation generally include fines and potential imprisonment, though these specifics are not detailed in this particular explanatory statement. The Act ensures that the rights of persons (other than the Commonwealth) are not adversely affected by the TCO, and it does not impose any liabilities on any person for actions taken before the TCO came into force.