EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011542
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.
Melbourne Water Corporation applied for a TCO in respect of certain water pump stations on 05 March 2010.
Instrument
TCO No 1011542 was made on 28 May 2010. It declares that those certain water pump stations 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. 1011542 is taken to have come into force on 05 March 2010.
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. 1011542, made under the Customs Act 1901 in 2010, addresses the need to provide tariff concessions for specific goods, in this case, certain water pump stations. The Customs Act 1901 facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the customs duty on specified goods. Melbourne Water Corporation applied for a TCO for these water pump stations on 5 March 2010, and the CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria under section 269C of the Act. Consequently, TCO No. 1011542 was issued on 28 May 2010, declaring that the water pump stations are subject to a prescribed tariff item with a duty rate of free, instead of the general 5% rate. The instrument does not disadvantage any person other than the Commonwealth and allows for potential duty refunds for importers under the Customs Regulations.
Scope and Application
The Tariff Concession Instrument No. 1011542, made under the Customs Act 1901, applies specifically to the water pump stations for which Melbourne Water Corporation sought a Tariff Concession Order (TCO). This Act facilitates the reduction or exemption of customs duty on certain goods, provided they meet the criteria set out in section 269C. The application for a TCO is processed by the Chief Executive Officer of Customs, who must ensure that the goods in question are not substitutable by goods produced in Australia in the ordinary course of business. The TCO applies nationally and benefits entities such as Melbourne Water Corporation by providing a tariff concession on imported goods, in this case, exempting the specified water pump stations from the general rate of duty of 5% and applying a rate of duty that is free. The instrument does not disadvantage or impose any liabilities on persons other than the Commonwealth, and any rights of importers are preserved, with potential for duty refunds on imports since the TCO’s effective date.
Key Provisions
The primary operative sections of this legislation include sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901 (the Act). Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the date of lodgement, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, as per section 269P(3), the CEO must issue a TCO. In this case, the TCO No. 1011542 was issued for certain water pump stations, declaring that these goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a rate of duty that is free, down from the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission with the CEO. In this instance, no submissions were received. Secondly, section 269S(1) provides that a TCO is to be taken as coming into force on the date the application was lodged, which was 05 March 2010 for TCO No. 1011542. Moreover, the Act ensures that the TCO does not affect the rights of any person other than the Commonwealth in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered. Importers, however, will benefit from the TCO, as they can apply for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations.
For breaches of the provisions set out in the Customs Act 1901, the Act includes various offences and penalties. While the specific penalties are not detailed in this legislation, under the broader Customs Act, breaches can lead to both civil and criminal penalties. Civil penalties can include fines and the forfeiture of goods, while criminal penalties may include imprisonment and fines. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in other sections of the Customs Act. The Act ensures that the rights of non-Commonwealth parties are protected and that the imposition of any new duties or liabilities is avoided for actions taken prior to the TCO's effective date.