EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802897
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 check valves on 09 April 2008.
Instrument
TCO No 0802897 was made on 04 July 2008. It declares that those certain check 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. 0802897 is taken to have come into force on 09 April 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 Tariff Concession Instrument No. 0802897 was enacted in 2008 as part of the Customs Act 1901 to address a specific need within Australia’s customs duty framework. The Act, overseen by the Parliament of Australia, establishes a mechanism through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, providing a lower rate of customs duty for specified goods. This instrument was introduced to ensure that the application process for tariff concessions is transparent and fair, allowing businesses to benefit from reduced customs duties on goods for which no substitutable Australian-made alternatives exist. The policy objective of this legislation is to promote trade efficiency and support industries by reducing the cost burden on imported goods, thereby encouraging competitiveness and economic growth.
The Tariff Concession Instrument No. 0802897 specifically addresses an application by Shell Refining Proprietary Limited for a tariff concession on certain check valves, which was approved on 4 July 2008. This instrument was implemented following the CEO's satisfaction that no substitutable goods were being produced in Australia at the time of the application, thus meeting the core criteria set out in the Customs Act. The instrument declares that these specific check valves are subject to a zero rate of duty, down from the general rate of 10%, and it came into effect on the date the application was lodged, 9 April 2008. This legislative action ensures that the rights of importers are protected, allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which apply reduced rates of customs duty to certain goods. This legislation applies to any person or entity seeking a reduction in customs duty on specific goods, provided the goods do not fall under the exclusions listed in section 269SJ. The application of a TCO is contingent upon the CEO being satisfied that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. The TCO mechanism is available nationally across Australia, and its application is not restricted to any particular state or territory, thus extending its reach across the entire Commonwealth. The TCO does not affect pre-existing rights or impose liabilities on any person except the Commonwealth. The process for issuing a TCO includes a public notice period as per section 269K(1) of the Act, although no objections were raised during the public consultation for TCO No. 0802897. This particular TCO, effective from 9 April 2008, applies to certain check valves and provides a concessional rate of duty, making it free instead of the general 10% rate.
Key Provisions
The Tariff Concession Instrument No. 0802897 under the Customs Act 1901 is a crucial legislative measure that establishes a reduced customs duty rate for certain check valves. According to Section 269F, any person can apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) regarding specific goods. If the CEO determines that the application pertains to goods not listed in Section 269SJ, which details goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria stipulated in Section 269C. Specifically, this requires confirming that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the application meets these criteria, the CEO is mandated under Subsection 269P(3) to issue a written TCO, specifying the reduced duty rate for the goods.
The obligations imposed by this Act on the relevant parties, particularly the CEO, are significant. The CEO must meticulously evaluate each TCO application against the core criteria outlined in the Act. This involves verifying the production status of substitutable goods in Australia on the application date. Additionally, the CEO is required to publish a notice in the Gazette, as per Subsection 269K(1), inviting submissions from any interested parties who might have reasons to oppose the TCO. In this particular case, no submissions were received, simplifying the CEO's decision-making process. The Act also ensures that the TCO does not adversely affect the rights of any person, except the Commonwealth, in relation to actions taken before the TCO's registration date.
The Act delineates specific consequences for non-compliance with its provisions. Breaches of the conditions set forth in the TCO could result in severe penalties. Although the explanatory statement does not explicitly detail these penalties, it is reasonable to infer that violations could lead to civil or criminal liabilities under the broader framework of the Customs Act 1901. These penalties could include fines, imprisonment, or other corrective measures as deemed appropriate by the relevant authorities. The specifics of these penalties would be determined in accordance with the applicable sections of the Act and any associated regulations.
In conclusion, the Tariff Concession Instrument No. 0802897 provides a clear pathway for reducing customs duty rates on certain check valves, provided the core criteria are met. It imposes clear obligations on the CEO to evaluate applications and publish notices in the Gazette. Furthermore, it ensures that the rights of non-Commonwealth entities are protected. Non-compliance with the Act's provisions could lead to significant civil or criminal penalties, underscoring the importance of adhering to the stipulated guidelines.