EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925658
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 applied for a TCO in respect of certain potabilisation plant on 20 July 2009.
Instrument
TCO No 0925658 was made on 02 October 2009. It declares that those certain potabilisation 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. 0925658 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 to establish a comprehensive framework for the administration of customs duties and other charges, as well as to regulate the importation and exportation of goods in Australia. Among its various provisions, Part XVA of the Act introduced a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (CEO). The primary problem or gap that this scheme was introduced to address was the need to provide relief for certain goods that could not be produced in Australia or where substitutable goods were not available domestically. By allowing the CEO to grant tariff concessions, the Act aimed to support industries and individuals by reducing the customs duty on specific goods, thereby promoting economic efficiency and competitiveness. The policy objective, as stated in the Act, is to ensure that such tariff concessions are granted only when it is in the public interest and when no substitutable goods are produced in Australia.
The Tariff Concession Instrument No. 0925658, introduced under the authority of the Customs Act 1901, was enacted by the Parliament of Australia. This specific instrument, which came into force on 20 July 2009, granted a tariff concession to Water Corporation for certain potabilisation plant. The CEO was satisfied that no substitutable goods were produced in Australia, and thus, a TCO was issued, making the general rate of duty on these goods free, as opposed to the standard 5%. This legislative action was taken to benefit the rights of importers and to encourage the importation of these specific goods without the burden of customs duty.
Scope and Application
The Tariff Concession Instrument No. 0925658 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods imported into Australia. The Act allows the Chief Executive Officer of Customs to grant these concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. This instrument specifically relates to certain potabilisation plant for which Water Corporation applied on 20 July 2009, and it was subsequently granted on 2 October 2009, effective from the date of application. The instrument reduces the duty on these goods from the general rate of 5% to free, benefiting importers who can apply for refunds of duty paid prior to the concession. The application of this TCO is confined to the goods specified and does not affect any pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0925658 under the Customs Act 1901 (section 269C, 269F, 269P, and 269S) detail the procedure and criteria for applying for and granting a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ and meets the core criteria in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a lower rate of customs duty. Section 269P(3) mandates that the CEO must make a TCO if satisfied that the application meets the core criteria.
The Act imposes specific obligations on both the applicant and the CEO. For applicants, the primary obligation is to ensure that their application meets the core criteria, particularly the condition in section 269C that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. The CEO’s obligations include verifying the application’s validity, considering any submissions received in response to the published notice, and making a decision within the stipulated timeframe. If the CEO is satisfied that the application meets the criteria, they must publish a notice in the Gazette and subsequently make the TCO.
In terms of penalties and consequences, the Customs Act 1901 does not specify penalties for breaches related to the TCO application process. However, any misuse or fraudulent application could potentially lead to criminal or civil consequences under other relevant provisions of the Act. For instance, if an applicant provides false information or engages in fraudulent activities to obtain a TCO, they could face criminal charges, including fines and imprisonment. Additionally, any person who knowingly uses a TCO to evade customs duty could face substantial penalties, including fines and potential imprisonment. These penalties are intended to ensure compliance and uphold the integrity of the customs duty system.
Overall, the Tariff Concession Instrument No. 0925658 provides a structured process for obtaining tariff concessions on specific goods, ensuring that only eligible goods are granted reduced customs duties. The obligations on both the applicant and the CEO are clearly defined to maintain transparency and fairness in the application process. While the Act does not explicitly outline penalties for breaches related to TCO applications, broader provisions of the Customs Act 1901 provide mechanisms to address any fraudulent activities.