EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119444
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 ion exchange tanks on 17 June 2011.
Instrument
TCO No 1119444 was made on 12 September 2011. It declares that those certain ion exchange 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. 1119444 is taken to have come into force on 17 June 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 was enacted by the Australian Parliament to provide a framework for the administration of customs and excise duties. One of the mechanisms it introduced to manage these duties is the Tariff Concession Order (TCO), which allows for the reduction of customs duty on certain imported goods. The 2011 Tariff Concession Instrument No. 1119444 was introduced to address a specific gap in the application of duty on certain ion exchange tanks. The policy objective of this instrument is to provide relief to importers of these goods by offering a concession on the duty rate, provided that no substitutable goods are produced in Australia. This legislative action aims to benefit importers by potentially reducing their duty costs and ensuring that the application of duty aligns with the broader economic and trade policy objectives of the Customs Act.
Scope and Application
The Tariff Concession Instrument No. 1119444 is an instrument made under Part XVA of the Customs Act 1901, which provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This particular TCO, made on 12 September 2011, applies to certain ion exchange tanks for which GE Betz Pty Ltd lodged an application on 17 June 2011. The Act applies to any person or entity that seeks to import goods subject to a TCO and thereby benefit from the reduced customs duty rates specified in the order. The geographic reach of this legislation is national, with the application of the TCO across all jurisdictions in Australia. The Act excludes certain goods from the scope of a TCO under section 269SJ, and the CEO must ensure that the goods in question do not fall into this category before proceeding with the TCO. The instrument may be further extended or restricted through subordinate instruments, which would provide additional clarity or conditions for the application of the TCO.
Key Provisions
The main sections of this legislation are Sections 269C, 269B, 269D, 269E, 269P, and 269SJ of the Customs Act 1901, which provide the framework for the application and approval process of Tariff Concession Orders (TCOs). Section 269C outlines the core criteria that an application must meet, while Sections 269B and 269E define key terms such as "goods produced in Australia" and "ordinary course of business". Section 269P(3) mandates the creation of a TCO if the application meets these criteria, and Section 269SJ specifies the goods that cannot be subject to a TCO. TCO No. 1119444 applies these provisions to certain ion exchange tanks, granting them a tariff concession.
Under this Act, entities such as GE Betz Pty Ltd must apply to the Chief Executive Officer of Customs for a TCO if they wish to benefit from a lower rate of customs duty on specific goods. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia. The CEO has the responsibility of assessing the application against the core criteria set out in Section 269C and making a written order if satisfied that the application meets these criteria. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit their views on the proposed TCO. This ensures transparency and provides an opportunity for stakeholders to voice any objections.
Failure to comply with the requirements of this Act can lead to various consequences. If a TCO is granted inappropriately, it could result in financial losses to the government due to the reduced customs duty. The Act does not explicitly outline specific penalties for non-compliance, but breaches of customs regulations generally carry significant penalties. These may include fines, imprisonment, or both, depending on the severity and intent of the breach. Additionally, any party found to be acting in bad faith or providing false information in their application could face legal action.
The commencement of TCO No. 1119444 on 17 June 2011, the date the application was lodged, means that any ion exchange tanks imported on or after this date will benefit from the tariff concession. This concession allows for a free rate of duty on these goods, as opposed to the general rate of 5%. The Act ensures that this tariff concession does not affect the rights of any person other than the Commonwealth, meaning that no one will be disadvantaged or have new liabilities imposed on them as a result of the TCO. Importers, however, will benefit from this concession, as they can apply for a refund of any duty paid on the goods imported since the TCO came into force.