EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613540
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.
Austral-Powerflo Solutions Pty Ltd applied for a TCO in respect of certain steam valves on 15 August 2006.
Instrument
TCO No 0613540 was made on 08 December 2006. It declares that those certain steam 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. 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. 0613540 is taken to have come into force on 15 August 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, establishes a framework for the administration of customs and excise duties. One of the key mechanisms within this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide tariff concessions on specific goods. The problem or gap this legislation aims to address is the need for a streamlined process to reduce customs duties on certain goods under specific conditions, thereby promoting trade efficiency and potentially benefiting domestic industries by making imported goods more competitively priced. Instrument TCO No. 0613540, made under the Customs Act, grants tariff concessions on certain steam valves, applying a free rate of duty where the general rate is 10%, effective from 15 August 2006. This instrument was introduced after Austral-Powerflo Solutions Pty Ltd applied for the concession, and no objections were received during the consultation period, ensuring the process was transparent and inclusive. The policy objective, as per the Act, is to facilitate smoother trade operations by reducing the financial burden on importers of specified goods.
Scope and Application
The Tariff Concession Instrument No. 0613540, under the Customs Act 1901, applies to goods for which an application for tariff concession has been made by a person or entity, specifically in this instance, Austral-Powerflo Solutions Pty Ltd, which applied for a tariff concession order (TCO) for certain steam valves on 15 August 2006. This Act pertains to the goods specified in the application, and its geographic reach is national, as it involves the Commonwealth’s customs duties and the application of tariff concessions. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The CEO’s decision to make a TCO, declaring that certain steam valves are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, is based on the absence of substitutable goods produced in Australia, as defined in section 269D and section 269E of the Act. The TCO was registered on the date of the application, 15 August 2006, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ (sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ). These sections outline the process for applying for, evaluating, and granting a TCO, which provides a lower rate of customs duty on certain goods. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO. If the application is not in respect of goods specified in section 269SJ, the CEO must assess whether the application meets the core criteria set out in section 269C. This requires the CEO to determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269B and 269E.
The obligations and requirements imposed by the Act on the parties or entities it governs are centred around the application and approval process for TCOs. When a TCO application is submitted, the CEO must ensure it is valid and not in respect of goods specified in section 269SJ. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections (subsection 269K(1)). If no objections are received, and the CEO is satisfied that the application meets the core criteria, the CEO must issue a written order (a TCO) declaring that the goods in question are eligible for the prescribed tariff concession (subsection 269P(3)). This process ensures transparency and allows for stakeholder input before a TCO is granted.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the Act for breaches related to the TCO process itself. However, the Act does provide for certain administrative actions and legal remedies in the event of disputes or non-compliance. For instance, if a party believes that a TCO was improperly granted or that they have been unfairly disadvantaged by its terms, they may seek judicial review or other legal recourse. While the Act does not specify maximum penalties for breaches in this context, general provisions under Australian law regarding administrative actions and judicial review would apply.