EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604352
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.
Alcan Gove Development Pty Ltd applied for a TCO in respect of certain steam safety valves on 24 February 2006.
Instrument
TCO No 0604352 was made on 04 August 2006. It declares that those certain steam safety 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 10%. 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. One submission objecting to the TCO application was received from Mack Valves 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 Mack Valves Pty Ltd 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. 0604352 is taken to have come into force on 24 February 2006.
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 a framework for the administration of customs duties and related matters in Australia. One of its key components is Part XVA, which facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders allow for lower rates of customs duty on specified goods. The Tariff Concession Instrument No. 0604352, made under this Act in 2006, provides a practical example of how this scheme operates. Specifically, it grants tariff concessions on certain steam safety valves, lowering their duty from 10% to free, effective from the date the application was lodged, 24 February 2006. This legislative instrument aims to address the gap in duty rates for goods not produced domestically and ensures that Australian businesses have access to competitively priced imported goods. The CEO's decision-making process includes opportunities for public consultation, as demonstrated by the submission from Mack Valves Pty Ltd, which was considered in the decision-making process.
Scope and Application
The Tariff Concession Instrument No. 0604352 under the Customs Act 1901 applies to the concession of customs duty rates for specific goods, in this instance certain steam safety valves, where an application has been made and approved by the Chief Executive Officer of Customs. This legislation allows for a reduced or free customs duty rate for goods that are not substitutable with any produced in Australia, as outlined in section 269C of the Act. The instrument was applied to Alcan Gove Development Pty Ltd’s application concerning certain steam safety valves, resulting in a reduction of the general duty rate of 10% to a free rate, effective from the date the application was lodged, 24 February 2006. The instrument’s application is national in scope, consistent with the federal nature of the Customs Act, and it does not disadvantage any existing rights of importers or impose new liabilities on any party, except for the Commonwealth. The instrument can be subject to further detail and refinement through subordinate instruments, which can extend or restrict its application.
Key Provisions
Section 269C of the Customs Act 1901 stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. A TCO is an order that applies a lower rate of customs duty to certain goods, as outlined in section 269F of the Act. If the Chief Executive Officer of Customs (CEO) is satisfied that an application meets these core criteria, they must make a TCO, as provided in section 269P(3) of the Act. This process ensures that Australian industries are protected from competition with locally produced goods when a TCO is issued.
Under this legislation, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid, as per subsection 269K(1) of the Act. Additionally, the CEO may invite specific individuals or entities to submit written oppositions if they believe there may be grounds for opposing the TCO, in accordance with subsection 269M(1) of the Act. This provision ensures a transparent and inclusive process for considering TCO applications.
Failure to comply with the requirements of the Customs Act 1901, including the provisions related to TCOs, may result in various civil or criminal consequences. While the specific offences and penalties are not detailed in the provided text, it is generally understood that breaches of customs legislation can lead to penalties, fines, or other legal actions. The severity of these penalties would depend on the nature and extent of the breach.
The Tariff Concession Order No. 0604352, which came into effect on 24 February 2006, applies to certain steam safety valves and reduces the general rate of duty from 10% to free. This order was made following an application by Alcan Gove Development Pty Ltd, and the CEO was satisfied that no substitutable goods were produced in Australia at the time of the application. The order benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect, without imposing any liabilities on any person.
The Tariff Concession Instrument No. 0604352 demonstrates the process by which the CEO of Customs can issue a TCO under the Customs Act 1901. The Act sets out the core criteria for TCO applications, the obligations of the CEO in processing these applications, and the rights of importers. The specific penalties for non-compliance with the Act are not detailed in the provided text, but breaches of customs legislation can lead to various civil or criminal consequences.