EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909931
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.
Matthews Fire Alarm applied for a TCO in respect of certain valves fire hydrant on 25 March 2009.
Instrument
TCO No 0909931 was made on 05 June 2009. It declares that those certain valves fire hydrant 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. 0909931 is taken to have come into force on 25 March 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 Customs Act 1901, enacted by the Parliament of Australia, established a framework for the regulation of customs duties and the facilitation of international trade. To address the need for flexibility in tariff application, the Act introduced the scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This scheme allows for the application of lower rates of customs duty on specified goods, provided certain criteria are met. Specifically, a TCO can be issued if no substitutable goods are produced in Australia on the day the application is lodged. The Tariff Concession Instrument No. 0909931, made on 5 June 2009, exemplifies this process, granting tariff concessions for certain valves fire hydrants, reducing their duty rate from the general 5% to free. This measure was introduced following an application by Matthews Fire Alarm on 25 March 2009, and it aims to facilitate trade by lowering the duty burden on specific imported goods, thereby benefiting importers without imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0909931, which was created under the Customs Act 1901, applies to goods specified in the instrument, namely certain valves for fire hydrants, and is relevant to entities and individuals involved in the importation of these goods into Australia. This instrument is part of a broader scheme under Part XVA of the Customs Act 1901, where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs to provide a lower rate of customs duty on certain goods. The TCO applies to the particular goods identified, and the concession is contingent upon the goods not being substitutable by any goods produced in Australia in the ordinary course of business. The geographic reach of this instrument is national, as it pertains to the application and enforcement of customs duties across Australia. The instrument does not affect the rights of any person except the Commonwealth and does not impose any liabilities on individuals or entities other than the Commonwealth. It is worth noting that the application and potential scope of TCOs may be extended or restricted through subordinate instruments made under the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 0909931 (the Instrument) under the Customs Act 1901 (the Act) applies to certain valves for fire hydrants, reducing their customs duty from the general rate of 5% to free. This applies if no substitutable goods were produced in Australia on the date the application was lodged (section 269C). The Instrument came into force on 25 March 2009, the date the application was made (subsection 269S(1)). The Chief Executive Officer of Customs (the CEO) issued the Instrument on 5 June 2009, following a determination that the application met the core criteria, including no substitutable goods being produced in Australia (section 269P(3)).
Under the Act, an applicant must submit a TCO application to the CEO (section 269F). The CEO must then decide if the application meets the core criteria (section 269C). If satisfied, the CEO issues a Tariff Concession Order (section 269P(3)). The CEO is required to publish a notice in the Gazette inviting submissions from any interested persons (subsection 269K(1)). In this instance, the CEO did not receive any submissions (Consultation). The CEO’s decision to issue the Instrument is subject to judicial review if the decision is flawed.
Failure to comply with the requirements of the Act may result in various penalties. Subsection 269M(2) of the Act provides that a person who makes a false or misleading statement in a TCO application is guilty of an offence. The maximum penalty for this offence is 120 penalty units or imprisonment for six months, or both (subsection 269M(3)). Additionally, subsection 269P(5) of the Act provides that a person who contravenes the Act in relation to a TCO may be liable to a penalty of up to 10,000 penalty units. These penalties underscore the importance of compliance with the statutory requirements and the seriousness of non-compliance.