EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1106208
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.
Davey Water Products Pty Ltd applied for a TCO in respect of certain filter tanks on 16 February 2011.
Instrument
TCO No 1106208 was made on 23 May 2011. It declares that those certain filter tanks 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. 1106208 is taken to have come into force on 16 February 2011.
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, introduced a scheme to facilitate the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). This legislation aims to address the issue of providing tariff concessions on specific goods, thereby reducing the rate of customs duty applied to those goods. As stated in the explanatory statement, the Tariff Concession Instrument No. 1106208 was created following an application by Davey Water Products Pty Ltd for a TCO in respect of certain filter tanks, which was approved as no substitutable goods were produced in Australia. The policy objective is to benefit importers by allowing them to apply for a refund of duty on goods imported since the day the TCO came into force, without imposing any liabilities on any person.
Scope and Application
The Customs Act 1901, as amended and specified in Tariff Concession Instrument No. 1106208, governs the application and implementation of Tariff Concession Orders (TCOs) for goods entering the Australian market. These orders, which are issued by the Chief Executive Officer of Customs, provide for a reduced or free rate of customs duty on specified goods under certain conditions. The Act applies to any individual or entity that imports goods into Australia and seeks tariff concessions. The scope of the Act extends to all goods, excluding those listed in section 269SJ, which are ineligible for tariff concessions. The Act's application is national, governed under Commonwealth law, and it does not disadvantage any existing rights of persons other than the Commonwealth, ensuring that no retroactive liabilities are imposed for actions prior to the TCO's registration date. Importers benefit from the ability to claim duty refunds for goods imported since the effective date of the TCO. The Act may further refine its application through subordinate instruments, such as regulations, which provide additional detail and operational guidelines for the implementation of TCOs.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1106208, made under the Customs Act 1901, pertain primarily to the making of a Tariff Concession Order (TCO) for certain filter tanks. According to section 269F of the Act, a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided that the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then determine whether the application meets the core criteria set out in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO's decision to grant a TCO is documented in a written order, which specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations and requirements imposed by the Act on parties or entities it governs include the necessity for the CEO to assess the validity of a TCO application and to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this case, the CEO did not receive any submissions opposing the TCO. Once a TCO is made, it is taken to have come into force on the day on which the application for the TCO was lodged, in accordance with subsection 269S(1) of the Act. Importantly, the TCO does not affect the rights of a person as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.
Under the Customs Act 1901, any breach of the provisions relating to TCOs may result in various offences, penalties, or consequences. While the specific offences and penalties for non-compliance with the Customs Act are not detailed in this particular TCO, general provisions of the Act may apply. For instance, section 269C of the Act may include provisions that could lead to criminal penalties if false or misleading information is provided in a TCO application. Additionally, section 269K(1) may carry civil penalties if the requirement to publish a notice in the Gazette is not met. It is important to note that the maximum penalties for such offences would be determined according to the broader provisions of the Customs Act 1901, which could include fines or imprisonment, depending on the severity of the breach.