EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808302
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.
Dixon (Asia Pacific) Pty Ltd applied for a TCO in respect of certain agricultural valves on 15 May 2008.
Instrument
TCO No 0808302 was made on 08 August 2008. It declares that those certain agricultural 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. 0808302 is taken to have come into force on 15 May 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. 0808302, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on certain imported goods, specifically agricultural valves in this instance. This instrument was developed to facilitate the importation of goods that are not produced domestically, thereby promoting trade and reducing costs for importers. The instrument was enacted by the Chief Executive Officer of Customs following a valid application by Dixon (Asia Pacific) Pty Ltd, who sought tariff concessions for agricultural valves on 15 May 2008. The instrument declares that these valves are subject to a zero rate of customs duty, down from the general rate of 5%, effective from the date of the application. This policy objective aligns with the broader aim of the Customs Act 1901 to streamline trade processes and support economic growth through strategic tariff adjustments.
Scope and Application
The Tariff Concession Instrument No. 0808302 is a legislative measure under Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to create Tariff Concession Orders (TCOs) for certain goods. These orders result in a lower rate of customs duty being applied to the specified goods. The Act applies to any person who can apply for a TCO in respect of goods, provided those goods are not explicitly excluded under section 269SJ of the Act. A TCO application is deemed to meet the core criteria if, on the day it was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. Once the CEO is satisfied that the core criteria are met, they must issue a written TCO, specifying the applicable item from Schedule 4 to the Customs Tariff Act 1995. This particular TCO No. 0808302, which was made on 8 August 2008, applies to certain agricultural valves and declares that they are subject to item 50 of the Customs Tariff, with the rate of duty reduced to free. The application of this TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth, but it does provide beneficial effects to importers who can apply for a refund of duty on goods imported since the TCO came into force on 15 May 2008.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) that pertain to Tariff Concession Orders (TCOs) include section 269C, which stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written TCO order. In this case, TCO No. 0808302, made on 8 August 2008, declares that certain agricultural valves are subject to a duty-free rate under the Customs Tariff Act 1995. This decision was based on the CEO's satisfaction that no substitutable goods were being produced in Australia. Section 269K(1) further requires the CEO to publish a notice in the Gazette inviting submissions from the public, although in this instance, no submissions were received.
The Act imposes several obligations on the parties involved. The CEO must thoroughly evaluate each TCO application to determine if it meets the core criteria outlined in section 269C. If the application is deemed valid, the CEO must issue a written TCO order as per section 269P(3). The CEO must also publish a notice in the Gazette, inviting public submissions, as required by section 269K(1). Applicants for a TCO must ensure their applications meet all specified criteria and provide all necessary information to the CEO to facilitate a fair and thorough assessment.
The Act also delineates the consequences of non-compliance or breach of its provisions. However, the explanatory statement does not explicitly mention offences, penalties, or civil/criminal consequences for breaches in relation to TCOs. It is important to note that while the explanatory statement provides a comprehensive overview of the TCO process, it does not detail the penalties for non-compliance with the Act's provisions. Therefore, further examination of the Customs Act 1901 may be necessary to understand the potential penalties associated with non-compliance.