EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606051
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.
Caltex Refineries (NSW) Pty Ltd applied for a TCO in respect of certain butterfly valves on 31 March 2006.
Instrument
TCO No 0606051 was made on 23 June 2006. It declares that those certain butterfly 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. 0606051 is taken to have come into force on 31 March 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 Tariff Concession Instrument No. 0606051 was enacted in 2006 under the Customs Act 1901 to provide a mechanism for reducing customs duty rates on specific goods. This legislative instrument was introduced to address the need for tariff concessions that can stimulate economic activity by lowering the cost of imported goods. The instrument is designed to allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that do not have Australian-made substitutes and are not explicitly excluded under section 269SJ of the Act. The objective is to facilitate the import of these goods at a reduced duty rate, thereby benefiting importers and potentially encouraging further trade and investment.
The Tariff Concession Instrument No. 0606051 specifically concerns an application by Caltex Refineries (NSW) Pty Ltd for a TCO on certain butterfly valves. Following a review, the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. As a result, the instrument declares that the specified butterfly valves are subject to a 0% duty rate, down from the general rate of 5%. This change is effective from 31 March 2006, the date the application was lodged, and no submissions were received in opposition to the TCO. This instrument ensures that the rights of importers are advantageously affected and that no new liabilities are imposed on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty on certain goods. This Act applies to persons or entities that seek to import goods eligible for tariff concessions and to the goods themselves, provided they meet the core criteria stipulated in the Act. The application process involves an assessment by the CEO to determine if the goods in question are not substitutable by products manufactured in Australia and are not listed in section 269SJ, which outlines goods ineligible for tariff concessions. The CEO must also ensure that the application meets the core criteria set out in sections 269C, 269B, and 269D of the Act. The geographic reach of this legislation is national, operating under the Commonwealth jurisdiction. Any exclusions or exemptions from the application of a TCO are clearly defined in the Act itself, with specific provisions that ensure the rights of importers are protected and that no existing liabilities or disadvantages are imposed on persons other than the Commonwealth. The instrument extends its application through subordinate instruments, ensuring compliance and enforcement of the tariff concessions.
Key Provisions
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Section 269F allows an individual to apply to the CEO for a TCO in respect of specific goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO, they must then determine if the application meets the core criteria set out in section 269C. This section stipulates that an application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The Act imposes several obligations on the parties involved. The CEO must publish a notice in the Gazette (subsection 269K(1)) as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. In this case, no submissions were received in response to the notice. Furthermore, section 269S(1) provides that a TCO is to be taken as having come into force on the day the application for the TCO was lodged.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. While the specific penalties for breach are not detailed in the explanatory statement, the Act generally provides for penalties for non-compliance with its provisions. These penalties could include fines or imprisonment, depending on the nature and severity of the breach. The maximum penalties, if specified, would be determined according to the particular sections of the Act that are breached. The explanatory statement does not provide specific details regarding the penalties for breach of the TCO provisions.