EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801351
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.
Shell Refining Proprietary Limited applied for a TCO in respect of certain slide valves on 23 January 2008.
Instrument
TCO No 0801351 was made on 04 April 2008. It declares that those certain slide 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. 0801351 is taken to have come into force on 23 January 2008.
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, established a framework under which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. This legislation was introduced to address the need for a streamlined process to reduce customs duty rates on specific goods, provided certain criteria were met. One such criteria involves ensuring that the goods in question are not substitutable by domestically produced items. The Tariff Concession Instrument No. 0801351, made on 4 April 2008, exemplifies this process, as it grants a tariff concession on certain slide valves, reducing their duty rate from 5% to free, following an application by Shell Refining Proprietary Limited. This instrument was enacted without any submissions against it and is designed to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0801351 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), which are granted by the Chief Executive Officer of Customs (the CEO). This Act facilitates the application process for TCOs by individuals or entities seeking a lower rate of customs duty on specified goods. The application must meet the core criteria as outlined in section 269C of the Act, which requires that no substitutable goods are produced in Australia on the day the application was lodged. This particular TCO applies to certain slide valves, which are now subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of Shell Refining Proprietary Limited for these valves was accepted, and the TCO came into force on 23 January 2008. The legislation ensures that the rights of the Commonwealth are preserved, and no person other than the Commonwealth will be disadvantaged or imposed with liabilities under this TCO. The instrument does not extend or restrict its application through subordinate instruments.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0801351 include section 269C, which stipulates the core criteria for a Tariff Concession Order (TCO) application. According to section 269C, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B further defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are crucial for determining the eligibility of a TCO application. Subsection 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to the TCO.
The obligations imposed by the Act on the parties involved primarily revolve around the application and assessment process for a TCO. An applicant, such as Shell Refining Proprietary Limited in this case, must submit an application to the CEO detailing why the goods in question should receive a tariff concession. The CEO, on their part, has the responsibility to assess whether the application meets the core criteria specified in section 269C. If satisfied, the CEO must then make a written order as per section 269P(3), which is evidenced by TCO No. 0801351 in this instance. Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made.
In terms of breaches and penalties, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for failing to comply with the Act's provisions related to TCOs. However, general compliance with the Act and its regulations is crucial, as non-compliance could potentially lead to legal actions or administrative penalties under the broader framework of the Customs Act. The Act's provisions are designed to ensure that tariff concessions are granted fairly and in accordance with established criteria, thus maintaining the integrity of the customs duty system. While the specific penalties for non-compliance with TCO provisions are not detailed in the Act, they could potentially involve financial penalties or other administrative actions as prescribed under the broader customs laws.