EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930932
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.
South Australian Water Corporation applied for a TCO in respect of certain intake and pre-treatment plant on 24 August 2009.
Instrument
TCO No 0930932 was made on 06 November 2009. It declares that those certain intake and pre-treatment 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. 0930932 is taken to have come into force on 24 August 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, provides a framework for the application of customs duty on imported goods. The Act, particularly Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can reduce the rate of customs duty on certain goods. TCO No. 0930932 was introduced to address a specific need identified by the South Australian Water Corporation for tariff concessions on certain intake and pre-treatment plant, which were not being produced in Australia in the ordinary course of business and had no substitutable domestic alternatives. This concession aimed to facilitate the importation of these goods without incurring the standard customs duty, thereby reducing the costs for the applicant and potentially benefiting the broader market by making these goods more accessible. The CEO was satisfied that the application met the core criteria under section 269C of the Act, leading to the issuance of the TCO, which took effect from the date of the application on 24 August 2009.
Scope and Application
The Customs Act 1901 provides a framework through which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. The Act applies to any person or entity that can demonstrate that the goods they are importing are not substitutable by products manufactured in Australia and that no such goods were produced in Australia on the date the TCO application was lodged. The scope of the Act is national, applying across all states and territories of Australia, and its provisions are enforceable under Commonwealth law. Exclusions to the TCO scheme are specified in section 269SJ of the Act, which lists goods that are not eligible for tariff concessions. The application of the Act may be extended or detailed through subordinate instruments such as the Customs Tariff Act 1995, which sets out the specific duty rates and schedules. In this instance, TCO No. 0930932, made on 6 November 2009, applies a zero rate of duty to certain intake and pre-treatment plant, effective from 24 August 2009, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P. Section 269F of the Customs Act 1901 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 is valid and meets the core criteria set out in section 269C, then the CEO must issue a TCO as specified in section 269P. The TCO reduces the customs duty on certain goods to zero if no substitutable goods are produced in Australia in the ordinary course of business. For the purposes of this legislation, section 269D defines ‘goods produced in Australia’, section 269E defines ‘ordinary course of business’ and section 269D defines ‘substitutable goods’.
The obligations and requirements imposed by the Act on the parties or entities it governs include the duty of the CEO to make a TCO if the application is valid and meets the core criteria. The applicant must provide sufficient evidence that no substitutable goods are produced in Australia. The CEO must publish a notice in the Gazette inviting submissions from interested parties and consider these submissions before deciding whether to make a TCO. The Act also mandates that 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.
There are no explicit offences, penalties, or civil/criminal consequences for breach detailed in the explanatory statement. However, if the CEO decides to make a TCO without satisfying the core criteria, this could lead to legal challenges from interested parties or those who believe they have been disadvantaged by the decision. In such cases, the aggrieved party could seek judicial review of the decision under the Administrative Decisions (Judicial Review) Act 1977. The maximum penalties for non-compliance with the Customs Act 1901 or associated regulations are not specified in this explanatory statement but can range from fines to imprisonment, depending on the severity of the offence.