EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930933
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 effluent treatment and disinfection plant on 24 August 2009.
Instrument
TCO No 0930933 was made on 13 November 2009. It declares that those certain effluent treatment and disinfection 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. 0930933 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 Tariff Concession Instrument No. 0930933, enacted in 2010 under the Customs Act 1901, addresses the need to facilitate the importation of specific goods by providing tariff concessions. The Customs Act 1901 establishes a framework where the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs), which lower the customs duty on certain goods. This legislative instrument was introduced to provide a mechanism for reducing the duty on goods that are not produced in Australia and for which there are no substitutable domestic goods. The policy objective is to support the importation of essential goods that are not domestically produced, thereby benefiting importers by potentially reducing their duty costs. The South Australian Water Corporation's application for a TCO concerning certain effluent treatment and disinfection plant exemplifies this objective, as the instrument allows for these specific goods to be imported duty-free, reflecting the Act's intent to encourage the importation of non-substitutable goods.
Scope and Application
The Tariff Concession Instrument No. 0930933 applies to the South Australian Water Corporation in relation to specific effluent treatment and disinfection plant. This legislation pertains to the Customs Act 1901 and specifically targets the customs duty reduction on these particular goods. The Act applies to the entities that produce or import the specified goods within Australia, and the geographic reach is nationwide under the Commonwealth. The instrument was issued to provide tariff concessions when the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria outlined in the Act. The application of the TCO does not retroactively affect the rights or impose any liabilities on individuals or entities other than the Commonwealth, safeguarding the interests of those who might have imported such goods before the concession was effective.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P(3) and 269S(1) of the Customs Act 1901, and TCO No. 0930933 itself. Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria specified in section 269C, they are required to issue a TCO under section 269P(3), which specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. The TCO comes into force on the date the application is lodged, as stipulated in section 269S(1). In this case, the CEO accepted an application from the South Australian Water Corporation for a TCO concerning certain effluent treatment and disinfection plant on 24 August 2009, and issued TCO No. 0930933 on 13 November 2009.
The Act imposes several obligations and requirements on the CEO in relation to TCO applications. Upon receiving a valid application, the CEO must determine whether it meets the core criteria under section 269C. This involves assessing whether the goods in question are substitutable by goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO is satisfied that the application meets these criteria, they are required to issue a written TCO under section 269P(3). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge a submission if they believe the TCO should not be made, as required by subsection 269K(1) of the Act. In this instance, no submissions were received by the CEO.
The Customs Act 1901, along with TCO No. 0930933, also establishes the legal framework for potential offences and penalties associated with non-compliance or misuse of the concessions provided by a TCO. While the explanatory statement does not specify detailed penalties for breaches of the Act or the TCO, it is reasonable to infer that breaches could lead to civil or criminal consequences under the general provisions of the Customs Act 1901. For instance, penalties may include fines, imprisonment, or other sanctions as prescribed by the Act for non-compliance with customs regulations. However, the specific maximum penalties would need to be referred to within the broader context of the Customs Act and associated regulations.