EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905825
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.
Dbngp Wa Pipeline Trust applied for a TCO in respect of certain ball valves on 19 February 2009.
Instrument
TCO No 0905825 was made on 15 May 2009. It declares that those certain ball 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. 0905825 is taken to have come into force on 19 February 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. 0905825, enacted in 2009, is an amendment to the Customs Act 1901, designed to address the need for tariff concessions that benefit specific industries by reducing customs duty on particular imported goods. This instrument was introduced to provide a streamlined process for granting tariff concessions, allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply reduced rates of customs duty on goods not produced in Australia, thereby promoting fair trade practices and supporting industries unable to compete domestically. The policy objective behind this legislative change is to facilitate smoother import processes for industries requiring imported goods, thereby enhancing economic efficiency and supporting local businesses indirectly.
The instrument was enacted by the Parliament of Australia, reflecting a broader legislative intent to modernise and simplify customs procedures under the Customs Act 1901. By allowing for the creation of TCOs, the Act ensures that certain goods can enter the market at a lower cost, which is intended to benefit consumers and businesses alike while maintaining the integrity of the customs duty system. The Tariff Concession Instrument No. 0905825 exemplifies this approach by specifically addressing the tariff on certain ball valves, reducing the general rate of duty from 5% to free, thereby providing direct economic benefits to the importing entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which lower the customs duty rates for certain goods. This Act applies to any person or entity seeking tariff concessions for goods that are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The geographic scope of this legislation is national, as it pertains to the Commonwealth of Australia, and its application extends to all entities and individuals involved in the importation of goods. The Act is silent on any exclusions, exemptions, or thresholds apart from the specified goods in section 269SJ that are ineligible for tariff concessions. The TCOs themselves may be further defined or extended through subordinate instruments, as per the requirements of the Customs Act 1901, though no such extensions or restrictions are indicated in this specific instance.
Key Provisions
The primary sections of this legislation include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C sets out the core criteria that a TCO application must meet, specifically that 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 CEO is satisfied the application meets these criteria, a written order (the TCO) must be made. The explanatory statement clarifies that the CEO must declare the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Customs Act 1901 on parties under this legislation include the requirement for applicants to ensure their applications for TCOs meet the specified core criteria. The CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid. If no submissions are received, the CEO proceeds with making the TCO. The CEO must also ensure that the rights of non-Commonwealth persons are not adversely affected by the TCO and that no liabilities are imposed on them in relation to actions taken before the TCO's effective date.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach within the provided explanatory statement. However, breaches of other sections within the Customs Act 1901 or associated regulations may result in penalties. These penalties can range from fines to imprisonment, depending on the severity and nature of the breach. The exact penalties would be detailed in the relevant sections of the Customs Act or the Customs Regulations 1993.