EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909936
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 applied for a TCO in respect of certain pressure limiting valve on 25 March 2009.
Instrument
TCO No 0909936 was made on 05 June 2009. It declares that those certain pressure limiting valve 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. 0909936 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 Tariff Concession Instrument No. 0909936, enacted in 2009, is a response to applications under the Customs Act 1901, specifically addressing the need to provide tariff concessions for certain goods. This legislation was introduced to facilitate lower customs duty rates for goods specified in Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs, provided the goods meet the core criteria outlined in the Act. The objective of this instrument is to ensure that the application process for tariff concessions is transparent and allows for public consultation, while also safeguarding the rights of importers by enabling them to apply for duty refunds on goods imported since the TCO was taken to have come into force. The Tariff Concession Instrument No. 0909936 was developed following a formal application and subsequent assessment by the CEO, and no objections were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0909936, issued under the Customs Act 1901, applies to any person who seeks to import specific goods, namely certain pressure limiting valves, for which they wish to obtain a tariff concession. The instrument grants a lower rate of customs duty on these goods, provided they meet the core criteria specified in section 269C of the Act. This includes ensuring that no substitutable goods are produced in Australia at the time the application is lodged, as defined in sections 269D and 269E of the Act. The geographic reach of the Act encompasses the entire Commonwealth of Australia, and the concession applies to the goods specified in the instrument from the date the application was lodged. The instrument does not impose any liabilities on persons other than the Commonwealth and ensures that the rights of importers are beneficially affected. Subordinate instruments may extend or further define the application of the Act, although no such instruments are mentioned in the explanatory statement for this particular TCO.
Key Provisions
The Tariff Concession Instrument No. 0909936 under the Customs Act 1901 (section 269F) pertains to the application for a Tariff Concession Order (TCO) for certain pressure limiting valves, which were applied for by Reliance Worldwide on 25 March 2009. The CEO of Customs, upon being satisfied that the application meets the core criteria and that no substitutable goods were produced in Australia on the date of the application (section 269C), issued the TCO on 5 June 2009. This order declares that the specified pressure limiting valves are to be subject to a 5% duty rate, which is reduced to free under the terms of this order (section 269P(3)).
Under the Customs Act 1901, the CEO has certain obligations when considering a TCO application. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted (subsection 269K(1)). In this instance, the CEO did not receive any submissions opposing the TCO, which facilitated its issuance. Furthermore, the TCO is effective from the date the application was lodged, 25 March 2009 (subsection 269S(1)). This commencement date ensures that any rights or liabilities arising from the application of the TCO are calculated from this point forward, without retroactively affecting any actions or omissions prior to this date.
Entities and individuals governed by the Customs Act 1901 are required to adhere to the provisions of the TCO. Importers of the specified pressure limiting valves can benefit from the reduced duty rate and may apply for a refund of any duties paid on imports since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). It is also crucial that the rights of all parties are preserved, and no existing liabilities or rights are adversely affected by the issuance of the TCO.
The Customs Act 1901 stipulates consequences for non-compliance with the provisions of a TCO. Although specific penalties are not detailed in the explanatory statement, breaches of the Act generally attract penalties under the Customs Act and associated regulations. These can include fines and imprisonment for criminal offences, or penalties under civil law, depending on the severity and intent of the breach. The maximum penalties for breaches of customs legislation can be substantial, reflecting the importance of compliance with these regulations.