EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1033693
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.
Kembla Watertech Pty Ltd applied for a TCO in respect of certain manhole coating and cleaning machines on 22 July 2010.
Instrument
TCO No 1033693 was made on 11 October 2010. It declares that those certain manhole coating and cleaning machines 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. 1033693 is taken to have come into force on 22 July 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 a scheme for Tariff Concession Orders (TCOs), which are used to grant tariff concessions for specific goods. The Customs Act 1901 was amended to include Part XVA, which formalised the process for making TCOs. The introduction of this part aimed to address the need for a more streamlined process to grant tariff concessions, ensuring that Australian businesses can access necessary goods at reduced customs duty rates when appropriate. In this context, TCO No 1033693 was enacted to provide tariff concessions for certain manhole coating and cleaning machines, reflecting the policy objective of supporting industry by reducing the cost of importing these specific goods.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 1033693, applies to individuals and entities seeking to import goods into Australia for which a Tariff Concession Order (TCO) can be applied. Specifically, this instrument targets Kembla Watertech Pty Ltd’s application for a TCO concerning certain manhole coating and cleaning machines, aiming to lower the customs duty rate from the standard 5% to free. This Act's application is national, operating under the Commonwealth jurisdiction, and it is limited to goods specified in the application and not those outlined in section 269SJ of the Act, which includes certain restricted items. The instrument itself was made on 11 October 2010 and came into effect on the date the application was lodged, 22 July 2010, as stipulated by the Act. Notably, the TCO does not disadvantage any person or impose new liabilities except for potentially benefiting importers who can now apply for a refund of duty on these goods from the effective date.
Key Provisions
The Tariff Concession Instrument No. 1033693 under the Customs Act 1901 applies to certain manhole coating and cleaning machines, specifying that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty-free status (section 269P(3)). This instrument, issued by the Chief Executive Officer of Customs, was made on 11 October 2010 after the application by Kembla Watertech Pty Ltd on 22 July 2010. The core criteria for a Tariff Concession Order (TCO) under section 269C of the Customs Act 1901 were met, as the CEO was satisfied that no substitutable goods were produced in Australia at the time of the application. The TCO was published in the Gazette, inviting submissions from interested parties, but no submissions were received (subsection 269K(1)). The TCO is considered to have come into force on the date the application was lodged, 22 July 2010 (subsection 269S(1)).
The Customs Act 1901 imposes specific obligations on applicants seeking a Tariff Concession Order. An applicant must ensure their application meets the core criteria, particularly that no substitutable goods are produced in Australia (section 269C). Additionally, applicants must provide sufficient information to demonstrate compliance with these criteria. The CEO is required to publish the application in the Gazette and invite submissions from interested parties (subsection 269K(1)). Once the CEO is satisfied that the application meets the criteria, they must make a written order specifying the goods and the applicable tariff concession (section 269P(3)). Importers of the specified goods can apply for a refund of duty paid on those goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).
The Customs Act 1901 provides for various civil and administrative penalties for non-compliance with the Act. For instance, failure to comply with the provisions regarding Tariff Concession Orders could lead to financial penalties or other administrative actions. Specifically, under section 271 of the Act, penalties may be imposed for incorrect classification of goods or for providing false or misleading information in an application. The maximum penalties can include fines and imprisonment, depending on the severity of the breach. Additionally, any party found to have acted fraudulently or negligently in relation to the application or implementation of a TCO may face further civil or criminal consequences, including potential fines or imprisonment as specified under relevant sections of the Customs Act and other applicable legislation.