EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1109260
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.
GE Betz Pty Ltd applied for a TCO in respect of certain reverse osmosis filtration plants on 16 March 2011.
Instrument
TCO No 1109260 was made on 15 June 2011. It declares that those certain reverse osmosis filtration 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. 1109260 is taken to have come into force on 16 March 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 Australian Parliament, provides a framework for the administration of customs and excise duties. The Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, which can be made by the Chief Executive Officer of Customs. These orders apply a lower rate of customs duty to specified goods. The purpose of the legislation is to provide a mechanism for reducing customs duty on imported goods under certain conditions, such as when no substitutable goods are produced in Australia. In this context, TCO No. 1109260 was introduced to address the specific case of reverse osmosis filtration plants, ensuring that a lower rate of duty applies to these goods. This was achieved by the CEO of Customs being satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria outlined in the Act. The instrument came into effect on the date the application was lodged, without imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1109260, made under the Customs Act 1901, applies to reverse osmosis filtration plants that were the subject of an application by GE Betz Pty Ltd. This instrument, which was made on 15 June 2011, specifies that these particular filtration plants are eligible for a tariff concession order (TCO), resulting in a reduction of the general customs duty rate from 5% to free. The application of this TCO is contingent upon the Chief Executive Officer of Customs being satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C of the Act. The TCO came into effect on 16 March 2011, the date the application was lodged, and it does not affect any rights or impose any liabilities on persons other than the Commonwealth, particularly benefiting importers by allowing them to apply for duty refunds on imports of these goods since the TCO's effective date. This legislative instrument does not specify any exclusions or exemptions but operates within the broader framework of the Customs Act 1901 and its subordinate regulations.
Key Provisions
The Customs Act 1901, through Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). A TCO can be applied for by a person under section 269F if the goods in question do not fall under the prohibited list in section 269SJ. If the CEO is satisfied that the application meets the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia at the time of the application, they must proceed to make a TCO. This is outlined in section 269P(3) and involves issuing a written order that applies a specific item from Schedule 4 of the Customs Tariff Act 1995 to the goods in question.
The obligations imposed by this Act require the CEO to carefully consider each application and ensure that the core criteria are met. This involves verifying that no substitutable goods were produced in Australia and publishing a notice in the Gazette, as per subsection 269K(1), inviting any interested parties to lodge submissions against the TCO if they believe it should not be made. In this instance, TCO No. 1109260 was made on 15 June 2011, following the application by GE Betz Pty Ltd for certain reverse osmosis filtration plants, with no submissions received in response to the Gazette notice.
The TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, ensuring that no one is disadvantaged or imposed with liabilities for actions taken before the TCO's effective date. This means that while the TCO can benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date, it does not retroactively impose any liabilities or disadvantages on individuals or entities. The TCO in this case, as specified in item 50 of Schedule 4 of the Tariff, allows for the importation of the specified reverse osmosis filtration plants with a duty rate of free, down from the general rate of 5%.
In terms of consequences for non-compliance, while the explanatory statement does not detail specific offences or penalties, the general framework of the Customs Act 1901 and associated regulations would typically apply. This could include civil penalties for non-compliance or failure to meet the specified conditions of the TCO, as well as potential criminal penalties for more serious breaches, such as fraudulent claims or deliberate misrepresentation of facts in the application process. The exact penalties would depend on the specific nature of the breach and could include fines or other sanctions as determined by the relevant authorities.