EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506769
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.
All Pumps Supplies applied for a TCO in respect of certain centrifugal flanged pump parts on 06 June 2005.
Instrument
TCO No 0506769 was made on 25 November 2005. It declares that those certain centrifugal flanged pump parts 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. Submissions objecting to the TCO application were received from Thompsons, Kelly & Lewis Pty Ltd and Davey Products Pty Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Klinger Australia, Thompsons, Kelly & Lewis Pty Ltd, Davey Products Pty Ltd and EP Pump Services to lodge a written submission.
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. 0506769 is taken to have come into force on 06 June 2005.
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 Tariff Concession Instrument No. 0506769, enacted in 2005, amends the Customs Act 1901 to provide tariff concessions on certain centrifugal flanged pump parts. This instrument was introduced to address the issue of ensuring that specific goods, in this case, certain pump parts, receive a lower customs duty rate when no substitutable goods are produced in Australia. The instrument was enacted by the Chief Executive Officer of Customs (CEO) under section 269F of the Act, following an application by All Pumps Supplies on 06 June 2005. The CEO determined that the application met the core criteria, as outlined in section 269C of the Act, leading to the issuance of the Tariff Concession Order (TCO). The TCO effectively reduces the duty rate from the general 5% to free, benefiting importers of these specific goods. The process included public consultation, with submissions received from various parties, and the TCO came into force on the date of the application, without imposing any liabilities on non-Commonwealth persons.
Scope and Application
The Customs Act 1901, as amended, establishes a framework for Tariff Concession Orders (TCOs) under which the Chief Executive Officer of Customs (CEO) may grant tariff concessions on certain goods, leading to reduced customs duty rates. This scheme is specifically applicable to individuals or entities that apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. A TCO is applicable when the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. The application process involves publishing a notice in the Gazette to invite submissions from interested parties, followed by consideration of any objections received. The TCO's geographic reach is national, as it applies across Australia. While the Act itself sets out the primary rules and criteria, subordinate instruments may extend or refine the application of the TCO scheme, ensuring that it operates within the broader legal and regulatory environment.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding certain goods. If the CEO is satisfied that the application meets the core criteria, outlined in section 269C, which involves ensuring that no substitutable goods are produced in Australia on the day the application was lodged, a TCO is made under section 269P(3). This TCO declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this instance, TCO No. 0506769 made on 25 November 2005 specifies that certain centrifugal flanged pump parts are subject to item 50 of the Tariff, resulting in a duty-free status for these goods.
The obligations imposed on parties governed by this Act include the requirement for the CEO to consider applications for TCOs and to ensure they meet the core criteria. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) and may invite submissions from interested parties (subsection 269M(1)). The CEO must also ensure that the TCO does not disadvantage or impose liabilities on any person other than the Commonwealth (subsection 269S(1)). For the specific TCO No. 0506769, the CEO accepted the application from All Pumps Supplies on 06 June 2005, ensuring that the application met the core criteria and subsequently publishing a notice inviting objections.
Breaching the obligations or requirements set out in this Act can result in various consequences. The Act does not explicitly state offences, penalties, or consequences for non-compliance with the TCO provisions. However, failure to comply with the core criteria for TCO applications could potentially lead to legal challenges or administrative penalties. For example, if the CEO fails to properly assess an application and subsequently issues an invalid TCO, it could result in litigation from affected parties. Additionally, importers who do not correctly apply for duty refunds under the TCO could face administrative delays or penalties. The precise legal and administrative consequences would depend on the specific circumstances of non-compliance and any subsequent legal interpretations.