EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514903
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.
Customs Fluid Power Pty Ltd applied for a TCO in respect of certain Hydraulic Directional Control Valves on 26 October 2005.
Instrument
TCO No 0514903 was made on 16 January 2006. It declares that those certain Hydraulic Directional Control 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 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. 0514903 is taken to have come into force on 26 October 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. 0514903, enacted in 2006, is a legislative instrument under the Customs Act 1901, which was passed by the Parliament of Australia. The instrument aims to address the need for tariff concessions on certain goods, providing a lower rate of customs duty for specified items. This was introduced to facilitate trade by reducing the financial burden on importers of particular goods. The instrument was created in response to an application by Customs Fluid Power Pty Ltd for tariff concessions on Hydraulic Directional Control Valves, where it was determined that no substitutable goods were produced in Australia, meeting the core criteria under the Act. The policy objective is to support importers by lowering the duty on specified goods, enhancing the competitiveness of these goods in the Australian market.
The instrument was implemented following the application process outlined in the Customs Act 1901, with the Chief Executive Officer of Customs making the decision based on the application's compliance with the core criteria. The instrument came into effect on the date the application was lodged, 26 October 2005, and provides a zero percent duty rate for the specified Hydraulic Directional Control Valves, down from the general rate of five percent. This change does not affect any existing rights or impose new liabilities on persons other than the Commonwealth, and it allows importers to apply for refunds of duty paid on the specified goods since the instrument's effective date.
Scope and Application
The Customs Act 1901, under which the Tariff Concession Instrument No. 0514903 was made, applies to individuals and entities seeking tariff concessions for specific goods imported into Australia. The Act governs the process by which the Chief Executive Officer of Customs (CEO) can grant Tariff Concession Orders (TCOs) to lower the rate of customs duty on goods, provided certain conditions are met. This legislation primarily impacts importers and producers of goods, particularly those seeking to import Hydraulic Directional Control Valves, and it operates within the national jurisdiction of Australia. The concessions granted by the TCO do not extend to goods specified in section 269SJ of the Act, which includes goods that cannot be subject to a TCO, and the concessions do not disadvantage any person or impose liabilities for actions taken before the TCO's effective date. The application of the Act can be further refined or expanded through subordinate instruments, such as regulations and further orders under the Customs Act.
Key Provisions
The primary sections of this legislation, specifically the Customs Act 1901, outline the process for applying for a Tariff Concession Order (TCO) and the criteria for its approval (ss 269F, 269C, 269B, and 269P(3)). For an applicant to be successful, the goods for which they are seeking concession must not be produced in Australia and must not have substitutable goods produced in the ordinary course of business (s 269C). The CEO is required to make a written order if the application meets these core criteria (s 269P(3)). Once the CEO is satisfied that the application meets these requirements, they must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). If no submissions are received, the TCO can proceed.
The obligations imposed by the Customs Act 1901 on the parties involved primarily focus on the application process and the conditions under which a TCO can be granted. The CEO must ensure that the application meets the criteria outlined in the Act, specifically that no substitutable goods are produced in Australia and that the goods are not already produced in the ordinary course of business (ss 269B, 269C, and 269E). The applicant, such as Customs Fluid Power Pty Ltd in this case, must provide sufficient information to meet these criteria. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid and provide an opportunity for submissions (s 269K(1)). The TCO, once made, must be registered and the rights of importers beneficially affected (s 269S(1)).
In terms of breaches and penalties, the legislation does not explicitly detail specific offences or penalties for non-compliance with the TCO process. However, it is implied that failure to meet the criteria for a TCO, or providing false information in an application, could lead to legal consequences. The Customs Act 1901 and associated regulations would govern such actions, potentially leading to fines or other penalties for those found in breach. The absence of explicit penalties in the Explanatory Statement suggests that existing legal frameworks would apply in cases of non-compliance.
The commencement date of the TCO is set as the date on which the application for the TCO was lodged (s 269S(1)). This means that, for TCO No. 0514903, the effective date is 26 October 2005. Importantly, the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person (s 269S(1)). This ensures that the rights of importers are protected, and they can apply for a refund of duty on goods imported since the TCO came into force (reg 126(1)(r)).