EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610181
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 Pty Ltd applied for a TCO in respect of certain knife gate and/or swing disc, shut off valves on 09 June 2006.
Instrument
TCO No 0610181 was made on 06 October 2006. It declares that those certain knife gate and/or swing disc, shut off 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. 0610181 is taken to have come into force on 09 June 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, enacted by the Australian Parliament, provides a framework for the imposition of customs duties and other charges on goods imported into Australia. To address the need for tariff concessions, Part XVA of the Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under specific conditions, thereby applying a lower rate of customs duty to goods that are the subject of such orders. This legislation aims to facilitate trade by reducing the cost of importing certain goods, provided they meet the core criteria and no substitutable goods are produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 0610181, made on 06 October 2006, outlines the application process and decision-making criteria for TCOs, ensuring that affected parties are given an opportunity to provide input before a TCO is finalised. The instrument declares that certain knife gate and/or swing disc shut-off valves are subject to a free rate of duty, effective from 09 June 2006, benefiting importers by potentially allowing them to claim refunds for duties paid on these goods prior to the TCO's effective date.
Scope and Application
The Customs Act 1901, under Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods for which an application has been made, provided that the goods do not fall under the category of items listed in section 269SJ, which are ineligible for tariff concessions. The application process requires that no substitutable goods, as defined in section 269D and 269E, are produced in Australia in the ordinary course of business. If the CEO determines that these criteria are met, a TCO is issued, which effectively applies a reduced or free rate of customs duty on the specified goods as per Schedule 4 to the Customs Tariff Act 1995. The geographic reach of this legislation is national, applying across Australia and affecting entities involved in the importation of the specified goods. The TCO does not retroactively disadvantage any party and allows for refunds of duties paid on eligible goods imported since the effective date of the concession. The scope of the Act can be further extended through subordinate instruments, allowing for additional goods to be included in the tariff concession scheme.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0610181 (referred to as TCO No. 0610181) are located within the Customs Act 1901, specifically sections 269C, 269F, and 269P. Section 269F allows for the application of a Tariff Concession Order (TCO) for goods to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application meets the core criteria, which include that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), the CEO must make a written order declaring the goods to which the prescribed tariff applies (section 269P(3)). In this case, the CEO made TCO No. 0610181 for certain knife gate and/or swing disc, shut off valves, declaring that they are subject to a 5% duty rate specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties it governs. For instance, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their concerns. In this instance, the CEO did not receive any submissions in response to the published notice. Furthermore, section 269S(1) stipulates that a TCO is considered to have come into force on the day the application for the TCO was lodged, which in this case was 09 June 2006.
There are no direct offences or penalties specified in the Tariff Concession Instrument. However, failure to comply with the obligations under the Customs Act 1901, such as incorrectly applying for a TCO or providing misleading information, could lead to various civil or criminal consequences. For example, knowingly providing false or misleading information in an application under section 269F could result in fines or imprisonment, as stipulated under the Customs Act 1901. The maximum penalties for such offences can vary depending on the nature and severity of the offence, but they could include substantial fines and/or imprisonment terms.
It is important to note that while the TCO itself does not impose any liabilities on any person, the underlying Customs Act 1901 does impose obligations and potential penalties for non-compliance. The Act ensures that the rights of individuals and entities are protected, particularly in relation to any duties or liabilities incurred prior to the TCO's effective date. This legal framework ensures that the tariff concession process operates within a clear and regulated environment, balancing the interests of both the government and the private sector.