EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934807
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 of WA applied for a TCO in respect of certain water pumping plant on 17 September 2009.
Instrument
TCO No 0934807 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. 0934807 is taken to have come into force on 17 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 Tariff Concession Instrument No. 0934807, enacted under the Customs Act 1901, was introduced to provide a solution for the Water Corporation of Western Australia, which sought tariff concessions on certain water pumping plant. This instrument was issued in response to an application by the Water Corporation of WA on 17 September 2009, and it was registered on 15 January 2010. The objective of this instrument is to reduce the customs duty on the specified water pumping plant from the general rate of 5% to free, as there were no substitutable goods produced in Australia at the time of application. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, while providing potential benefits to importers by allowing them to apply for a refund of duty on goods imported since the instrument's effective date of 17 September 2009.
Scope and Application
The Tariff Concession Instrument No. 0934807 under the Customs Act 1901 applies to specific water pumping plant as requested by the Water Corporation of Western Australia. This legislation allows for a reduced rate of customs duty for these goods, provided that the Chief Executive Officer of Customs determines that no substitutable goods are produced in Australia. The Act applies to any individual or entity seeking a tariff concession for specified goods, ensuring that the concession is granted only if it meets the core criteria outlined in the Act. The instrument has a national reach as it falls under the Commonwealth jurisdiction, and it does not impose any liabilities or affect the rights of any person other than the Commonwealth, particularly benefiting importers who can apply for duty refunds on goods imported since the instrument’s effective date. The Act also extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the tariff details for the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0934807 under the Customs Act 1901 (section 269C) establish the criteria for the Chief Executive Officer of Customs (CEO) to consider when deciding whether to grant a Tariff Concession Order (TCO) for certain water pumping plant. A TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Once the CEO is satisfied that the application meets these criteria, they are required to make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The instrument specifically declares that certain water pumping plant are goods to which item 50 of Schedule 4 applies, resulting in a free rate of duty for these goods, down from the general rate of 5% (section 269P(3)).
The obligations imposed by the Act on the CEO and applicants for a TCO are detailed and structured. Firstly, the CEO must assess whether the application for a TCO meets the core criteria by confirming that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). If the application satisfies these criteria, the CEO must make a written TCO order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made (subsection 269K(1)). The CEO did not receive any submissions in response to this invitation for TCO No. 0934807.
In terms of the consequences of non-compliance or breaches of the provisions outlined in the Act, the Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for breach in the context of TCO applications. However, the process established by the Act, such as the requirement for the CEO to follow the stipulated criteria and procedures, ensures that any deviation from these processes might lead to administrative or legal scrutiny. The Act's focus is primarily on the procedural correctness of granting TCOs and the financial benefits to importers who successfully apply for and are granted such concessions. The absence of imposed liabilities under this specific TCO (section 269S(1)) underscores the non-punitive nature of the Act’s focus on tariff concessions.