EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513455
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.
Valveco Industries Pty Ltd applied for a TCO in respect of certain stainless steel knife gate valves on 30 September 2005.
Instrument
TCO No 0513455 was made on 23 December 2005. It declares that those certain stainless steel knife gate valves 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.0513455 is taken to have come into force on 30 September 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 was enacted to provide for the collection of customs duty and to regulate the import and export of goods. The act was introduced to address the need for a structured and consistent system of tariffs and duties on imported goods. The Tariff Concession Instrument No. 0513455, enacted in 2005, provides for a concession on customs duty for certain stainless steel knife gate valves applied for by Valveco Industries Pty Ltd. The instrument was made by the Chief Executive Officer of Customs under section 269F of the Act, following an application by Valveco Industries Pty Ltd on 30 September 2005. The instrument was published in the Gazette, inviting submissions, none of which were received. The policy objective of the Tariff Concession Instrument No. 0513455 is to provide tariff concessions to promote the production and use of certain goods in Australia where no substitutable goods are produced in the country.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking tariff concessions on imported goods, ensuring that such concessions are granted only if no substitutable goods are produced in Australia in the ordinary course of business. The application of this Act is national, covering all goods imported into Australia. It specifically excludes goods listed in section 269SJ, which cannot be subject to a TCO. The scope of the Act can be extended or restricted by subordinate instruments, which may detail further criteria for TCO applications or modify existing provisions. The Tariff Concession Instrument No. 0513455, for example, was issued after Valveco Industries Pty Ltd applied for tariff concessions on certain stainless steel knife gate valves, reflecting the Act's application in facilitating trade by reducing duty rates for specific goods.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0513455 under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C specifies the core criteria that a TCO application must meet, which include the absence of substitutable goods being produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B provides definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." If the CEO is satisfied that the application meets the core criteria, they are required under section 269P(3) to issue a written TCO order.
The Act imposes several obligations on the parties and entities it governs. Firstly, any person wishing to apply for a TCO must ensure that their application meets the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was submitted. The CEO is obligated to review the application and, if satisfied, to issue a TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. This ensures transparency and allows for any objections to be considered before the TCO is issued.
Breaching the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. While the explanatory statement does not explicitly outline offences or penalties for breach, it is important to note that general provisions of the Act may apply. Offences under the Act can lead to fines and imprisonment, depending on the severity of the breach. For instance, knowingly making a false statement in an application for a TCO could result in penalties under section 269ZC of the Act, which might include substantial fines or imprisonment for up to two years. Additionally, failure to comply with the terms of a TCO could result in civil penalties, including the requirement to pay back any duty that was improperly refunded.
The Tariff Concession Instrument No. 0513455, as a specific application of the Customs Act 1901, does not impose any liabilities on any person apart from the Commonwealth. This is clarified under subsection 269S(1) of the Act, which states that a TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the TCO came into force. This protection ensures that the rights of importers and other stakeholders are safeguarded, and they can benefit from any duty refunds available under the TCO without facing additional liabilities.