EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912095
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 manually actuated ball valves on 09 April 2009.
Instrument
TCO No 0912095 was made on 03 July 2009. It declares that those certain manually 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. 0912095 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 Tariff Concession Instrument No. 0912095 was enacted in 2009 under the Customs Act 1901, aimed at addressing the issue of tariff concessions for specific goods that are not produced in Australia. This legislation facilitates the application process for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. The instrument was introduced to support the policy objective of ensuring that Australian businesses and industries are not unfairly disadvantaged by high import duties on goods that are not locally produced. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated to assess applications against the core criteria specified in the Customs Act. The TCO No. 0912095, which was issued in response to an application from Esso Australia Resources for manually actuated ball valves, exemplifies this process by reducing the duty on these specific goods from 5% to free, effective from the date of the application.
Scope and Application
The Tariff Concession Instrument No. 0912095, made under the Customs Act 1901, pertains specifically to the application for tariff concession orders (TCO) for certain manually actuated ball valves, submitted by Esso Australia Resources on 09 April 2009. This Act applies to any individual or entity seeking to import specified goods and benefit from reduced customs duties, provided they meet the criteria outlined in the Act. The instrument was approved by the Chief Executive Officer of Customs (CEO) on 03 July 2009, following a determination that no substitutable goods were being produced in Australia at the time of the application. The instrument thus declares that these valves are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively granting them a duty-free status. The scope of this legislation is national, as it falls under the Commonwealth’s purview, and it does not impose any liabilities on persons other than the Commonwealth nor affect their rights adversely as of the registration date. Importers stand to benefit from this concession, potentially applying for duty refunds on imports of these valves since the effective date of the TCO, 09 April 2009.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they pertain to Tariff Concession Orders (TCOs), include section 269F which allows for the application for a TCO, and section 269C which outlines the core criteria for approval. Under section 269F, any person can apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question are not specified in section 269SJ. Section 269C stipulates that the application must meet the core criteria, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets these criteria, they must issue a written order (the TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
The obligations and requirements imposed by the Act on parties and entities include the necessity for the CEO to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made. This is outlined in subsection 269K(1). Additionally, the Act requires that the TCO does not affect the rights of any person, except the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO’s registration. Importers are specifically granted the right to apply for a refund of duty on goods imported since the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations.
The Act also stipulates consequences for non-compliance. Although the explanatory statement does not detail specific offences, it is reasonable to infer that any misuse or misrepresentation in the application process could result in the CEO declining the application or potentially facing legal scrutiny. The maximum penalties for breaches of customs regulations are not detailed in this explanatory statement, but they typically include fines and potential imprisonment, depending on the severity of the breach. The Act ensures that the rights of all parties are protected and that the TCO does not impose any new liabilities on anyone except as provided for by law.