EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912093
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.
Esso Australia Resources applied for a TCO in respect of certain hydraulically actuated ball valves on 09 April 2009.
Instrument
TCO No 0912093 was made on 03 July 2009. It declares that those certain hydraulically actuated 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. 0912093 is taken to have come into force on 09 April 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 was enacted by the Australian Parliament to provide for the regulation of customs and excise duties and to administer the importation and exportation of goods. A significant feature of the Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This mechanism was introduced to address the gap where businesses could seek reduced customs duty rates for specific goods, provided they met certain criteria, such as the absence of substitutable goods produced in Australia. In this context, the Tariff Concession Instrument No. 0912093 was enacted on 3 July 2009, following an application by Esso Australia Resources for tariff concessions on certain hydraulically actuated ball valves. The policy objective is to support Australian businesses by reducing their costs on imported goods that are not locally produced, thereby potentially enhancing competitiveness and efficiency.
Scope and Application
The Tariff Concession Instrument No. 0912093, which was made under the Customs Act 1901, applies to certain hydraulically actuated ball valves and their importation into Australia. This legislation allows for the reduction of customs duty on these specific goods, provided that no substitutable goods are produced in Australia. The instrument is applicable to the applicant, Esso Australia Resources, and any other entities involved in the importation of these goods. The instrument extends to the Commonwealth jurisdiction and operates within the legislative framework provided by the Customs Act 1901 and the Customs Tariff Act 1995. Notably, the application of this Tariff Concession Order does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before the registration date. Any person considering the validity of the TCO could lodge a submission with the CEO, though in this case, no submissions were received. The commencement of the TCO is effective from the date the application was lodged, which is 09 April 2009.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0912093 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269F, 269P, 269SJ, and 269K. These sections collectively outline the process for applying for and granting a Tariff Concession Order (TCO). Specifically, section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO. The CEO must then decide if the application meets the core criteria set out in section 269C, which is primarily concerned with ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269B, 269D, and 269E. If the application is approved, a TCO is issued under section 269P, and it is effective from the date the application was lodged as per section 269SJ.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to evaluate the application to determine if it meets the core criteria and whether the goods specified in the application are eligible for a TCO. This involves ensuring that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties if the application is accepted as valid, as stipulated in section 269K. The CEO must also ensure that the rights of persons other than the Commonwealth are not adversely affected by the TCO.
Failure to comply with the requirements of the Customs Act 1901 and its associated regulations could lead to various consequences. While the specific penalties for breaches are not detailed in the explanatory statement, they may include fines, imprisonment, or other legal actions under the broader framework of the Customs Act. The severity of penalties would depend on the nature and extent of the breach, and the specific provisions of the Customs Act and related regulations would apply.
The TCO issued under Instrument No. 0912093 for certain hydraulically actuated ball valves effectively provides a free duty rate on these goods, reducing the general rate of 5% to zero. This concession is effective from the date the application was lodged, 09 April 2009. Importers of these goods can apply for a refund of duty paid since that date, further illustrating the beneficial impact on the rights of importers as outlined in paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person and does not disadvantage those who had rights as of the date of registration.