EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117288
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 disc filtration system on 31 May 2011.
Instrument
TCO No 1117288 was made on 15 August 2011. It declares that those certain disc filtration system 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. 1117288 is taken to have come into force on 31 May 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 for the administration of customs duties and includes a scheme for Tariff Concession Orders (TCOs). This scheme was introduced to address the need for reduced customs duties on specific imported goods where no suitable Australian-made alternatives exist, thereby supporting industries that might otherwise struggle to compete with cheaper imported goods. Tariff Concession Instrument No. 1117288, made on 15 August 2011, exemplifies this process by applying to certain disc filtration systems, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. As a result, these goods are subject to a zero rate of duty instead of the general 5% rate. The instrument ensures that the rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported since the effective date of the concession, which is 31 May 2011.
Scope and Application
The Tariff Concession Instrument No. 1117288, made under the Customs Act 1901, applies specifically to certain disc filtration systems. The Act permits the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods, provided that the application meets the core criteria outlined in the Act. In this instance, the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business, thereby allowing for the concession. The instrument, which came into force on 31 May 2011, grants free duty on the specified goods, which otherwise attract a general duty rate of 5%. The TCO extends its benefits to importers of the goods, enabling them to apply for a refund of duties paid on imports since the effective date of the concession. The instrument does not impose any liabilities on any person other than the Commonwealth and does not affect existing rights as at the date of registration.
Key Provisions
The primary sections of this legislation are sections 269C, 269B, 269D, 269E, 269P(3), and 269K(1) of the Customs Act 1901, which establish the criteria and process for making Tariff Concession Orders (TCOs). Section 269C requires that a TCO application meets the core criteria, which are primarily defined in sections 269B, 269D, and 269E. Specifically, section 269C states that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed tariff concession. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made.
The obligations imposed by this Act on the parties it governs are primarily procedural and transparent. The CEO of Customs must ensure that the application process for a TCO is followed meticulously, including the publication of notices in the Gazette and the consideration of any submissions received. The CEO is also required to determine whether the application meets the core criteria, which includes assessing whether substitutable goods were produced in Australia. Additionally, any person who receives a notice in the Gazette and believes there are reasons why a TCO should not be made has the opportunity to lodge a submission with the CEO.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. However, the specific offences, penalties, or consequences for breaches are not detailed in the Explanatory Statement. Generally, breaches of customs legislation can result in penalties such as fines, imprisonment, or both, depending on the severity and intent of the breach. The maximum penalties are determined by the specific provisions of the Customs Act 1901 and may vary based on the nature of the offence. The Explanatory Statement does not provide details on the specific penalties applicable to the provisions mentioned, but it is known that non-compliance with customs regulations can lead to significant legal repercussions.