EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011545
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 wastewater treatment plants on 05 March 2010.
Instrument
TCO No 1011545 was made on 28 May 2010. It declares that those certain wastewater treatment plants 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. 1011545 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise in Australia. This includes the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under section 269F of the Act, which allows for the application of a lower rate of customs duty on certain goods. Tariff Concession Instrument No. 1011545, made on 28 May 2010, was introduced to address the need for tariff concessions on specific wastewater treatment plants applied for by Melbourne Water Corporation. The policy objective is to ensure that essential goods, such as wastewater treatment plants in this instance, are accessible at reduced customs duty rates if they are not being produced domestically, thus facilitating their importation without the burden of high tariffs. This instrument ensures that the rights of existing importers are protected and does not impose any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 1011545, made under the Customs Act 1901, applies to specific wastewater treatment plants for which Melbourne Water Corporation applied on 05 March 2010. The Act provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to lower customs duty rates on certain goods, provided the application meets specific criteria. The CEO's decision to grant a TCO in this case was based on the absence of substitutable goods produced in Australia, aligning with the provisions of section 269C of the Act. The TCO, which came into force on the day of the application, specifies that the wastewater treatment plants are subject to a zero duty rate, differing from the general rate of 5%. The geographic reach of this legislation is Commonwealth, affecting the national customs duty on these goods. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The Tariff Concession Instrument No. 1011545 under the Customs Act 1901 establishes a lower rate of customs duty on certain wastewater treatment plants as of 5 March 2010 (sections 269F, 269P(3), and 269S(1)). This reduction from the general rate of 5% to a duty-free rate applies if the Chief Executive Officer of Customs (CEO) determines that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). The CEO must make a written order declaring the specified wastewater treatment plants as eligible for the concession once satisfied that the application meets the core criteria (section 269P(3)).
The obligations imposed by this legislation include the requirement for applicants to ensure that their applications are not in respect of goods specified in section 269SJ of the Customs Act, which lists goods that cannot be subject to a Tariff Concession Order (TCO) (section 269F). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid (subsection 269K(1)). If the CEO does not receive any submissions, as was the case with this particular application, the CEO proceeds to make the TCO (subsection 269K(1)). The CEO must also ensure that the TCO does not affect any person's rights or impose liabilities in relation to actions taken before the TCO's effective date (subsection 269S(1)).
The Act does not specify any direct criminal or civil penalties for breaches related to Tariff Concession Orders. However, any failure to comply with the terms of the TCO or the underlying statutory provisions could potentially lead to legal challenges or administrative actions. For instance, if the CEO incorrectly grants a TCO without meeting the core criteria, this could be subject to review and correction by the courts. The primary remedy for affected parties would be judicial review to ensure the CEO's decisions align with the statutory requirements. Furthermore, if an importer incorrectly claims a refund of duty under the TCO, this could lead to civil consequences such as the repayment of wrongly claimed duties plus interest.