EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934179
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.
Adelaide Aqua Pty Ltd applied for a TCO in respect of certain water pumping plant on 14 September 2009.
Instrument
TCO No 0934179 was made on 15 January 2010. It declares that those certain water pumping 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. 0934179 is taken to have come into force on 14 September 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 Australian Parliament, provides a framework for the administration of customs duties, including the ability to issue Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. The Act was introduced to address the need for a mechanism to provide relief from customs duties on specific goods, particularly when no substitutable goods are produced in Australia. The objective is to facilitate trade by reducing the cost of importing certain goods, thereby promoting economic efficiency and supporting Australian industries where applicable. This legislative approach allows for the dynamic adjustment of customs duties in response to market conditions and the specific needs of the economy, as evidenced by the issuance of TCO No. 0934179 for water pumping plant by Adelaide Aqua Pty Ltd, which was granted a tariff concession to encourage the importation of these goods.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0934179, applies to any entity or individual seeking a tariff concession order (TCO) for specific goods, provided the goods do not fall under the prohibited categories outlined in section 269SJ of the Act. This legislation operates at the national level, administered by the Chief Executive Officer of Customs who has the authority to grant TCOs that reduce or eliminate customs duty on certain imported goods. The TCO mechanism is specifically designed to benefit importers by offering them a lower rate of customs duty if the goods in question are not produced in Australia and have no substitutable goods available domestically. The instrument came into effect on the date the application was lodged, 14 September 2009, and does not retroactively affect any transactions or impose liabilities on any party other than the Commonwealth. The process includes a mandatory public consultation period, although no submissions were received for this particular TCO.
Key Provisions
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply to the CEO for a TCO in respect of certain goods, provided those goods do not fall under the category of those specified in section 269SJ which are ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria, they are required to make a written order (a TCO) under section 269P(3). For instance, TCO No 0934179 applies to certain water pumping plant as declared under item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods.
The Act imposes certain obligations on both the applicant and the CEO. For the applicant, the primary obligation is to submit a valid application under section 269F, ensuring the goods in question are not specified in section 269SJ. The CEO, on receiving a valid application, must assess if it meets the core criteria stipulated in section 269C, specifically verifying that no substitutable goods are produced in Australia on the date of the application. If satisfied, the CEO must publish a notice in the Gazette inviting any objections under subsection 269K(1). In this case, no submissions were received, facilitating the CEO’s decision to proceed with the TCO.
Breach of the conditions or misrepresentation in the application for a TCO can lead to significant consequences. The Act does not explicitly outline specific offences related to TCOs, but general provisions of the Customs Act 1901 apply, including potential civil and criminal penalties for misleading statements or fraudulent activities. The penalties can include fines and imprisonment, with the exact penalties determined by the court based on the severity and nature of the offence. The Act ensures that the TCO does not adversely affect existing rights of parties other than the Commonwealth and does not impose liabilities for actions taken prior to the TCO's effective date.