EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927246
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.
Hydratight Asia Pacific Pty Ltd applied for a TCO in respect of certain rotary pumps on 28 July 2009.
Instrument
TCO No 0927246 was made on 16 October 2009. It declares that those certain rotary pumps 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. 0927246 is taken to have come into force on 28 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 Tariff Concession Instrument No. 0927246 was enacted in 2009 as part of the Customs Act 1901. This legislation addresses the need for tariff concessions on specific goods that are not produced in Australia, thereby reducing customs duty for these imported goods. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs (CEO), who must ensure that the application meets core criteria as outlined in the Customs Act. The objective of this instrument is to facilitate the importation of goods that have no Australian-made substitutes, thereby supporting industries that rely on these imports.
The instrument was introduced to streamline the process of applying for tariff concessions, ensuring that the rights of importers are protected while reducing the financial burden associated with customs duties. The enacting body is the Australian Government, and the policy objective is to support industries that cannot produce certain goods domestically by allowing for reduced tariff rates on those goods. This approach encourages the efficient allocation of resources and supports economic activities that benefit from imported goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person who wishes to apply for a TCO in respect of goods, provided these goods do not fall under the category specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. The process begins when an application is submitted to the CEO, who then determines whether the application meets the core criteria set out in section 269C, specifically that no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they are required to make a written TCO order. This legislation has a national reach across Australia, applying to all importers and entities involved in the importation of goods subject to a TCO. The scope of the Act can be further extended through subordinate instruments, although no specific exclusions, exemptions, or thresholds are mentioned in the provided text. The Tariff Concession Instrument No. 0927246, made on 16 October 2009, exemplifies this process, granting a tariff concession on certain rotary pumps, reducing the duty rate from 5% to free.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0927246 (the Instrument) under the Customs Act 1901 (the Act) are sections 269C, 269F, 269K, 269P, 269S, and the provisions of Schedule 4 to the Customs Tariff Act 1995. Section 269F allows for the application of a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, a TCO is made under section 269P. The TCO, which is specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, declares that certain rotary pumps are subject to a lower rate of customs duty, in this case, free of charge, rather than the general rate of 5%. The CEO is required to publish a notice of the application in the Gazette under section 269K(1), inviting any interested parties to lodge submissions if they believe the TCO should not be made. The TCO is deemed to have come into force on the date the application was lodged, as per section 269S(1).
The obligations imposed on the parties governed by this Act include the requirement for Hydratight Asia Pacific Pty Ltd to apply for a TCO under section 269F. The CEO, upon receiving the application, must determine if it meets the core criteria outlined in section 269C, specifically ensuring that no substitutable goods were produced in Australia at the time of application. If the criteria are satisfied, the CEO is mandated to make a TCO under section 269P and publish the details in the Gazette as per section 269K(1). Importers of the goods affected by the TCO are entitled to apply for a refund of duty under paragraph 126(1)(r) of the Regulations. The CEO's decision-making process must be transparent, providing an opportunity for interested parties to voice their concerns.
The Act stipulates that failure to comply with the requirements can lead to civil or criminal consequences. Although the specific penalties are not detailed in the Instrument, breaches of the Customs Act 1901 may incur penalties under the relevant sections of the Act. For instance, non-compliance with the TCO provisions could potentially result in fines or other penalties as prescribed by law. The Act also provides for enforcement actions, including the possibility of legal proceedings against individuals or entities that fail to adhere to the TCO requirements or misuse the tariff concessions. These penalties are intended to ensure adherence to the regulations and to maintain the integrity of the customs duty system.
In summary, the Tariff Concession Instrument No. 0927246 establishes a framework for granting tariff concessions on certain rotary pumps, ensuring that these goods benefit from a reduced rate of customs duty. The obligations and requirements outlined in the Act are designed to facilitate a transparent and fair application process, while the potential consequences for non-compliance underscore the importance of adhering to the prescribed legal standards. The rights of importers are protected, allowing them to seek refunds for duties paid on the affected goods, thereby ensuring that the tariff concessions are effectively implemented.