EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902828
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.
Origin Energy Power applied for a TCO in respect of certain gate valves on 29 January 2009.
Instrument
TCO No 0902828 was made on 24 April 2009. It declares that those certain 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. 0902828 is taken to have come into force on 29 January 2009.
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. 0902828, enacted under the Customs Act 1901, was introduced to address the need for facilitating the import of specific goods without imposing prohibitive customs duties. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions for certain goods, provided no substitutable goods are produced in Australia. The Customs Act 1901 outlines the criteria for such concessions, ensuring that the application meets the core conditions set forth in the Act. Origin Energy Power applied for a tariff concession concerning certain gate valves, which was approved on 24 April 2009. The concession was made effective from 29 January 2009, the date of application, and has resulted in a duty-free status for the specified goods, previously taxed at 5%. This measure benefits importers by allowing them to claim refunds for duties paid on these goods since the concession date, without imposing any new liabilities on any party.
Scope and Application
The Customs Act 1901 applies to all persons and entities involved in the importation of goods into Australia, with a specific focus on those who may apply for Tariff Concession Orders (TCOs) under Part XVA. This legislation is applicable at the Commonwealth level and concerns the application of customs duties on goods, with a particular focus on providing concessions to certain goods that are not produced domestically. The Act allows for the CEO of Customs to make TCOs for goods where no substitutable goods are produced in Australia, effectively providing a lower rate of customs duty on these specified goods. The scope of this legislation extends to the entire nation and impacts importers directly by offering them the potential for duty refunds on goods imported since the date the TCO was taken to have come into force. Exclusions are made for goods specified in section 269SJ of the Act, which are ineligible for TCOs.
The application of the Customs Act 1901 is further regulated through subordinate instruments, such as the Customs Tariff Act 1995, which provides the schedule under which the duty rates for various goods are set. The Act allows for the CEO to make orders that specifically declare the duty rate for certain goods, as demonstrated by TCO No 0902828 for gate valves, which set a duty rate of free as opposed to the general rate of 5%. The process includes a requirement for public consultation, though in this instance, no submissions were received. The TCO does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of persons as at the date of registration concerning anything done or omitted before the registration date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0902828 (section 269P(3)) declare that the certain gate valves specified in the instrument are subject to a concession on customs duty. This means that the general rate of duty, which is 5%, does not apply to these goods, instead, the duty on these goods is free. The instrument is made under section 269C of the Customs Act 1901, which sets out the core criteria that must be met for a Tariff Concession Order (TCO) to be made. Specifically, the instrument was made because the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia on the day the application was lodged.
The Customs Act 1901 imposes obligations on several parties when it comes to TCOs. For applicants, it is necessary to ensure that the application meets the core criteria, which includes proving that no substitutable goods were produced in Australia. For the CEO, the Act requires them to consider the application and make a written order if the criteria are met. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before making a decision.
Breaching the requirements of the Customs Act 1901 or the conditions of a TCO can lead to both civil and criminal consequences. Civil penalties may include fines up to a specified amount, depending on the nature and severity of the breach. Criminal offences can result in penalties such as imprisonment, particularly if the breach involves fraudulent activities. The exact penalties are determined by other sections of the Act and related legislation, but they are designed to ensure compliance and uphold the integrity of the customs duty system.