EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509605
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.
Pax Australia Pty Ltd applied for a TCO in respect of certain Valve Sorters on 20 July 2005.
Instrument
TCO No 0509605 was made on 30 September 2005. It declares that those certain Valve Sorters 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 0%.
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. 0509605 is taken to have come into force on 20 July 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 Customs Act 1901, enacted by the Australian Parliament, introduced the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty for specified goods. This was introduced to address the need for tariff relief to ensure that Australian industries could compete effectively in the global market without being unduly burdened by high import duties on certain goods. The policy objective behind this legislative framework is to support economic efficiency and to protect local industries by preventing the import of goods that could be produced domestically, thus ensuring fair competition and safeguarding Australian businesses. In line with these objectives, TCO No. 0509605 was made on 30 September 2005 for certain Valve Sorters, resulting in a reduction of the duty rate from 5% to 0% for these goods, as no substitutable goods were produced in Australia. This instrument highlights the practical application of the TCO scheme, facilitating more competitive pricing for these goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0509605 applies to goods that are the subject of an application for a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901, specifically concerning Valve Sorters. This legislation applies to entities such as Pax Australia Pty Ltd, which can apply to the Chief Executive Officer of Customs (CEO) for a TCO. The scope of this Act encompasses goods that are not produced in Australia and for which there are no substitutable goods produced in the ordinary course of business. This Act has a national jurisdictional reach as it is enacted under the Commonwealth of Australia and applies across all states and territories. The Act does not specify any exclusions or thresholds other than those stipulated in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations made under the Customs Act 1901 or the Customs Tariff Act 1995. The commencement of the TCO is effective from the date the application for the concession was lodged, which in this case is 20 July 2005.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0509605 under the Customs Act 1901 (the Act) are sections 269C, 269P, and 269S. Section 269C defines the core criteria that must be met for a Tariff Concession Order (TCO) to be considered, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged. Section 269P(3) mandates that if these core criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written TCO declaring that the specified goods are subject to a lower rate of customs duty. Section 269S outlines the commencement of the TCO, stipulating that it comes into force on the date the application was lodged.
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must submit an application to the CEO, ensuring that it is not in respect of goods specified in section 269SJ, which excludes certain goods from being subject to a TCO. The CEO is required to assess the application against the core criteria set out in section 269C and, if satisfied, issue the TCO as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in subsection 269K(1). The CEO must also ensure that the TCO does not affect the rights of any person adversely or impose liabilities in relation to actions taken before the TCO's registration.
Breaching the provisions of the Customs Act 1901 can result in various civil or criminal consequences. For instance, making a false or misleading statement in an application for a TCO may lead to penalties as outlined in section 269W of the Act. The maximum penalty for such an offence is 5,000 penalty units or imprisonment for five years, or both, depending on the severity of the breach. Additionally, any person who knowingly or negligently contravenes a TCO may face fines and other penalties as specified under the Act. These measures ensure compliance and the integrity of the tariff concession scheme.