EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925435
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.
Aquaport Corporation applied for a TCO in respect of certain water filters and or purifiers on 17 July 2009.
Instrument
TCO No 0925435 was made on 09 October 2009. It declares that those certain water filters and or purifiers 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. 0925435 is taken to have come into force on 17 July 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 Parliament of Australia, established a framework through which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs (CEO). The Act aimed to address the need for a mechanism by which lower rates of customs duty could be applied to certain goods, provided they met specific criteria. Specifically, the Act sought to ensure that tariff concessions would only be granted in circumstances where no substitutable goods were produced in Australia in the ordinary course of business. In this context, TCO No. 0925435, issued on 9 October 2009, pertains to certain water filters and purifiers for which the general duty rate is 5%, but which are now subject to a free rate under the specified conditions of the concession. The policy objective is to facilitate trade and support economic activity by reducing the cost burden on importers of these goods.
Scope and Application
The Tariff Concession Instrument No. 0925435, made under the Customs Act 1901, applies to the goods specified in the instrument, namely certain water filters and purifiers. This legislation is applicable to individuals or entities that import these goods into Australia, as it provides a concession on the customs duty that would otherwise apply. The instrument targets the reduction of customs duty rates for these specific items, thereby impacting the importation process for those involved in bringing these goods into the country. The geographical scope of this Act is nationwide, applying across all states and territories of Australia, as it is a Commonwealth Act. The instrument does not specify any exclusions or exemptions, and the application process is governed by the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia at the time of application. The application of this concession is not extended or restricted through any subordinate instruments mentioned in the explanatory statement.
Key Provisions
The primary operative sections of this legislation, specifically Instrument TCO No. 0925435 under the Customs Act 1901, focus on the creation and effect of Tariff Concession Orders (TCOs) (s 269F, s 269C, s 269P(3)). These sections mandate that a TCO may be issued if the Chief Executive Officer (CEO) of Customs is satisfied that the application for tariff concessions meets the core criteria, particularly that no substitutable goods are produced in Australia (s 269C). In this case, the CEO determined that the application for tariff concessions for certain water filters and purifiers met the criteria and issued a TCO on 9 October 2009 (s 269P(3)). This TCO declares that these specific goods are subject to the terms of item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively setting their duty rate at free, as opposed to the general rate of 5% (s 269P(3)).
The obligations imposed by this legislation on the parties involved, particularly Aquaport Corporation as the applicant, include ensuring that the application for a TCO is made in accordance with the statutory requirements (s 269F). The CEO, upon receiving an application, has the duty to determine whether it meets the core criteria and, if satisfied, to issue a TCO (s 269C, s 269P(3)). Furthermore, the CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (s 269K(1)). In this instance, no submissions were received, facilitating the progression to the issuance of the TCO.
In terms of consequences for breaches of this legislation, the Customs Act 1901 does not explicitly state offences, penalties, or specific civil or criminal consequences for failing to comply with the provisions of a TCO or the process for its issuance. However, the Act's broader framework implies that non-compliance with customs regulations could lead to penalties under the Customs Act 1901 or other related Acts. For instance, knowingly making a false statement or representation in an application for a TCO could potentially lead to civil or criminal penalties under other sections of the Act or the Crimes Act 1914. The exact penalties would depend on the nature and severity of the breach, but could include fines or imprisonment.