EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836802
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.
Icon Valve Group applied for a TCO in respect of certain knife gate valves on 24 October 2008.
Instrument
TCO No 0836802 was made on 26 March 2009. It declares that those certain knife gate 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. 0836802 is taken to have come into force on 24 October 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 Australian Parliament, establishes a framework for administering customs and excise duties, which includes the mechanism for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument addresses the need for concessional tariffs for certain imported goods where no suitable Australian-made alternatives exist, thereby encouraging economic efficiency and trade. The Tariff Concession Instrument No. 0836802, made on 26 March 2009, is a response to an application by Icon Valve Group for a tariff concession on specific knife gate valves. The instrument was made following the satisfaction of the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The policy objective here is to ensure that Australian businesses and consumers benefit from reduced customs duties on these specific imported goods, facilitating their availability and affordability within the domestic market.
Scope and Application
The Tariff Concession Instrument No. 0836802 under the Customs Act 1901 applies to the specific goods identified in the Instrument, namely certain knife gate valves. This legislation facilitates a concession on customs duties for these goods, reducing the general duty rate of 5% to a rate of zero. The instrument applies to any person or entity importing these valves into Australia, thereby directly impacting those involved in the import and trade of these goods. The scope of the Act extends to all of Australia, with the concessions applying nationally. There are, however, exclusions for goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. The Act allows for the CEO to extend or restrict the application of the concessions through subordinate instruments, although this specific Instrument does not elaborate on such extensions or restrictions. The Instrument came into force on the date the application was lodged, 24 October 2008, and it does not affect the rights of any person in relation to activities conducted prior to its registration.
Key Provisions
The Tariff Concession Order No. 0836802, made under section 269P(3) of the Customs Act 1901, pertains to certain knife gate valves and specifies the conditions under which they are eligible for a tariff concession. The CEO of Customs must decide whether an application for such a concession meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If these criteria are satisfied, the CEO is required to make a written order, or Tariff Concession Order (TCO), declaring that the specified goods are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). In this instance, the TCO declares that the certain knife gate valves are subject to item 50 of Schedule 4, with the general rate of duty on these goods being 5% and the rate of duty for the goods subject to the TCO being free.
The obligations imposed by this Act on the parties it governs include the requirement for applicants to ensure their applications meet the specified core criteria (section 269C). Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made (subsection 269K(1)). The CEO must also consider any submissions received and make a decision based on whether the application meets the core criteria. The TCO itself imposes no liabilities on any person and does not affect the rights of any person as at the date of registration (subsection 269S(2)).
For breach of any of the provisions under the Customs Act 1901, various offences and penalties may apply. Although specific penalties are not detailed in the explanatory statement, breaches of the Customs Act can generally lead to civil or criminal penalties, including fines and imprisonment. The exact penalties depend on the specific provision breached and the severity of the breach. For example, knowingly making a false statement or representation in an application can result in significant fines and imprisonment, as per the general provisions of the Customs Act and related legislation.