EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828209
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.
Reliance Worldwide Pty Ltd applied for a TCO in respect of certain temperature and pressure relief valve parts on 27 August 2008.
Instrument
TCO No 0828209 was made on 21 November 2008. It declares that those certain temperature and pressure relief valve parts 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. 0828209 is taken to have come into force on 27 August 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. 0828209 was enacted in 2009 under the Customs Act 1901 to provide tariff concessions on certain goods, specifically temperature and pressure relief valve parts, which were the subject of an application by Reliance Worldwide Pty Ltd. The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument was made by the Chief Executive Officer of Customs after determining that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. The tariff concession applied to these goods effectively reduced the duty rate from 5% to free, with the instrument coming into force on the date the application was lodged, 27 August 2008. Importantly, this concession does not affect any rights or impose any liabilities on persons other than the Commonwealth, and importers can apply for refunds of duty paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0828209, made under the Customs Act 1901, applies to the concession of customs duty on certain temperature and pressure relief valve parts. This legislation facilitates the application for tariff concession orders by private entities, such as Reliance Worldwide Pty Ltd, and allows the Chief Executive Officer of Customs to approve these applications under specific conditions. The primary criterion for approval is that no substitutable goods are produced in Australia on the day the application is lodged, as defined by the Act. The instrument operates on a national level within the Commonwealth of Australia and aims to benefit importers by potentially reducing the duty on these goods from 5% to free. The scope of the Act extends to the issuance of subordinate instruments that may further define the application of tariff concessions, but no exclusions, exemptions, or specific thresholds are mentioned beyond the core criteria of production in Australia. The TCO does not disadvantage any person by affecting their rights as at the date of registration nor impose any liabilities on any person.
Key Provisions
The Tariff Concession Instrument No. 0828209, issued under the Customs Act 1901, pertains to Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods (section 269F). This particular instrument, TCO No. 0828209, was made on 21 November 2008, declaring that certain temperature and pressure relief valve parts are subject to a zero rate of duty instead of the usual 5% (subsection 269P(3)). This concession applies from the date the application for the TCO was lodged, which was 27 August 2008 (subsection 269S(1)).
The Act imposes certain obligations on both the applicant and the Chief Executive Officer of Customs (CEO). For the applicant, the primary requirement is to ensure that the application for a TCO is not for goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Additionally, the applicant must demonstrate that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO, on the other hand, must review the application to determine if it meets the core criteria and, if satisfied, must make a written order (TCO) specifying the reduced duty rate (subsection 269P(3)).
Upon acceptance of a TCO application, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, no submissions were received. The Act also ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose liabilities for actions taken prior to the registration date (subsection 269S(5)).
Breaches of the provisions of the Customs Act 1901, including the making of false statements in an application for a TCO, can result in criminal and civil penalties. The maximum penalty for contravening the Act may include fines and imprisonment, depending on the severity of the offence. Specifically, under section 269X of the Act, a person who knowingly makes a false statement in an application for a TCO may be liable to a penalty of up to $22,200 or imprisonment for up to two years, or both. Additionally, any person who contravenes the Act may be subject to civil penalties, including fines and restitution, as outlined in the relevant sections of the Act.