EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711938
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.
Stauff Corporation Pty Ltd applied for a TCO in respect of certain non pulsating discharge transfer pumps on 24 July 2007.
Instrument
TCO No 0711938 was made on 02 October 2007. It declares that those certain non pulsating discharge transfer pumps 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. 0711938 is taken to have come into force on 24 July 2007.
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 Parliament of Australia, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The 2007 Instrument F2007L04065, specifically TCO No. 0711938, was introduced to address the issue of applying tariff concessions to certain non pulsating discharge transfer pumps, reducing their customs duty rate to zero. This was achieved after Stauff Corporation Pty Ltd applied for the concession on 24 July 2007, and the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. The policy objective behind this concession is to facilitate the import of goods that are not domestically produced, thereby potentially lowering costs for importers and encouraging the use of imported products in specific sectors.
Scope and Application
The Tariff Concession Instrument No. 0711938 applies to certain non pulsating discharge transfer pumps, specifically those identified in the instrument, and pertains to the application of tariff concessions under Part XVA of the Customs Act 1901. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide a lower rate of customs duty on goods specified in the order. This particular TCO applies to goods for which Stauff Corporation Pty Ltd made an application on 24 July 2007, and it was declared on 2 October 2007. The instrument applies to the goods listed in item 50 of Schedule 4 to the Customs Tariff Act 1995, and the general rate of duty on these goods, which is 5%, is reduced to free under this TCO. The instrument's effect is national, as it operates within the jurisdictional scope of the Commonwealth of Australia. There are no stated exclusions or exemptions in the TCO itself, though certain goods specified in section 269SJ of the Customs Act 1901 cannot be subject to a TCO. The application of the TCO is effective from the date the application was lodged, 24 July 2007, and it does not disadvantage any person or impose liabilities for actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) that are relevant to this Tariff Concession Order (TCO) include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then determine whether the application meets the core criteria set out in sections 269C, 269B, and 269P. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The TCO is considered to have come into force on the day the application was lodged, as per subsection 269S(1) of the Act.
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for applicants to ensure that the goods they seek a TCO for are not listed in section 269SJ of the Act. Additionally, applicants must provide sufficient information to satisfy the CEO that the core criteria are met, particularly concerning the non-existence of substitutable goods produced in Australia. The CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1) of the Act. Once a TCO is made, it applies to the goods from the day the application was lodged, and it does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the registration date.
The Act does not explicitly outline specific offences or penalties for breaches related to TCO applications, but it does imply certain consequences for non-compliance. If a TCO is issued for goods that should not have qualified, it may lead to legal challenges or administrative actions to revoke the TCO. The CEO may also face scrutiny if they fail to follow the statutory requirements, such as not publishing notices in the Gazette as required. Importers who benefit from a TCO may face consequences if they do not comply with the terms and conditions of the TCO or if they are found to have misrepresented information in their application. The penalties for such actions could include financial penalties, fines, or the requirement to repay any duty benefits received under the TCO.