EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925653
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.
Water Corporation Pty Ltd applied for a TCO in respect of certain seawater intake plant on 20 July 2009.
Instrument
TCO No 0925653 was made on 25 September 2009. It declares that those certain seawater intake 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. 0925653 is taken to have come into force on 20 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 was enacted by the Parliament of Australia to provide a framework for the regulation of imports and exports, including the imposition of customs duties. The act allows for the creation of Tariff Concession Orders (TCO) under Part XVA, which can reduce the customs duty on certain goods if specific criteria are met. This particular instrument, Tariff Concession Instrument No. 0925653, was introduced to address the need for tariff concessions on specific imported goods where no substitutable Australian-produced goods exist. The Tariff Concession Order No. 0925653 was made on 25 September 2009, following an application by Water Corporation Pty Ltd for certain seawater intake plant, and became effective from 20 July 2009. The policy objective of this instrument is to ensure that importers of the specified goods can benefit from a reduced duty rate, provided no objections were raised during the consultation period.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCO) which provide lower rates of customs duty on certain goods. The Act applies to any person or entity that applies for a TCO, with the primary application being for goods that are not substitutable with any goods produced in Australia. The scope of the Act extends to the geographic jurisdiction of Australia, affecting both state and territory boundaries, as the Customs Act is a Commonwealth Act. The Act applies to the conduct of applying for and being granted a TCO, and to the transactions involving the importation of the goods that benefit from the concession. The application process is overseen by the Chief Executive Officer of Customs (CEO), who must ensure that the application meets the core criteria, including that no substitutable goods are produced in Australia. The TCO does not affect pre-existing rights of persons other than the Commonwealth and does not impose any new liabilities. The CEO is required to publish notices in the Gazette to allow for any objections to the TCO application, though in the case of TCO No. 0925653, no submissions were received. The commencement date of the TCO is the date on which the application was lodged, and in this instance, the TCO came into effect on 20 July 2009.
Key Provisions
The main operative sections of this legislation include sections 269C, 269B, 269D, 269E, and 269P, which define the criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C). Section 269B elaborates on the meanings of 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', which are critical for determining eligibility for a TCO. If an application for a TCO is made and the Chief Executive Officer of Customs (CEO) is satisfied that the goods do not have substitutable goods produced in Australia on the day the application was lodged, the CEO must make a TCO (section 269P(3)). This instrument then specifies the reduced duty rate for the goods, as seen in TCO No. 0925653, which sets the duty rate at free for certain seawater intake plant, previously at 5%.
The obligations imposed by this legislation are primarily on the CEO of Customs, who must assess applications for TCOs against the core criteria outlined in the Act. Once an application is accepted, the CEO must publish a notice in the Gazette inviting any objections to the proposed TCO. In this case, the CEO published the notice on 20 July 2009 but did not receive any submissions opposing the TCO. The CEO must also ensure that any TCO made does not adversely affect the rights of any person as they stood before the date of the TCO's registration. For TCO No. 0925653, this means that while the rights of importers are positively affected, enabling them to apply for duty refunds, no one else's rights are disadvantaged.
For breaches of the provisions governing TCOs, the Customs Act 1901 does not explicitly outline specific criminal or civil penalties within the explanatory statement. However, it is implicit that any misuse or fraudulent application for a TCO could potentially lead to legal repercussions under broader customs laws, including fines or imprisonment for offences such as fraud or misrepresentation. The penalties would depend on the severity and nature of the breach, and any associated legal proceedings would consider the relevant sections of the Customs Act and any other applicable laws.