EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714908
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.
Jet Technologies applied for a TCO in respect of certain valves or regulators on 14 September 2007.
Instrument
TCO No 0714908 was made on 16 November 2007. It declares that those certain valves or regulators 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. 0714908 is taken to have come into force on 14 September 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 Tariff Concession Instrument No. 0714908, enacted in 2007 under the Customs Act 1901, was designed to address the specific need for tariff concessions on certain imported goods, in this case, certain valves or regulators, which are subject to a lower rate of customs duty. This instrument was introduced to facilitate the importation of these goods by applying a free rate of duty, as opposed to the general 5% rate, thereby addressing the gap where such goods could not be produced domestically in the ordinary course of business. The instrument was enacted by the Chief Executive Officer of Customs in accordance with the provisions set out in Part XVA of the Customs Act, which allows for the making of Tariff Concession Orders. The policy objective of this instrument was to ensure that importers of these specific goods could benefit from the tariff concession, thereby potentially reducing costs and increasing competitiveness without imposing any additional liabilities or disadvantages to any party other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to the Tariff Concession Orders (TCO) process, which enables the Chief Executive Officer of Customs to provide lower rates of customs duty for specified goods. The Act allows an application for a TCO to be made by any person, provided the goods in question are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The application must meet core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The Act's jurisdiction is national, applying across Australia, as it is a Commonwealth Act. The TCO No. 0714908 applies specifically to certain valves or regulators, reducing their customs duty rate from 5% to free, effective from the date of application. The TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. The TCO does, however, benefit importers who may apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0714908, under the Customs Act 1901, are sections 269C, 269F, and 269P, which pertain to the application and approval process for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods, and section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P mandates that a written order, or TCO, be issued, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations and requirements on the parties involved. The CEO of Customs is required to assess whether a TCO application meets the core criteria under section 269C. If the application is not for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must determine if the application meets the core criteria. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit their views on the proposed TCO (subsection 269K(1)). This ensures transparency and allows for any objections to be considered before the TCO is issued.
There are no specific offences, penalties, or civil/criminal consequences outlined for breach of the TCO in the provided explanatory statement. However, it is implied that non-compliance with the terms of the TCO could potentially lead to legal consequences, such as the imposition of the standard duty rates on the goods if they are not correctly classified under the TCO. The CEO’s decision to issue a TCO is based on the fulfilment of specific criteria and the absence of objections from interested parties. Any failure to adhere to the requirements of the TCO could therefore result in the standard duty rates applying retroactively, affecting the rights and liabilities of the parties involved.