EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912098
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 motor actuated ball valves on 09 April 2009.
Instrument
TCO No 0912098 was made on 03 July 2009. It declares that those certain motor 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. 0912098 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, enacted by the Australian Parliament, outlines a framework for the application and administration of customs duties. The Tariff Concession Instrument No. 0912098, introduced on 03 July 2009, addresses the gap in the application process for tariff concessions on specific goods. This instrument was developed in response to an application by Esso Australia Resources for a tariff concession on certain motor actuated ball valves, effective from 09 April 2009, to ensure that no substitutable goods were produced in Australia at the time of the application. The policy objective of this instrument is to facilitate the concession of customs duties on particular goods, thereby potentially lowering costs for importers and promoting trade efficiency without imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0912098 is a specific legislative instrument made under the Customs Act 1901, which applies to the customs duty rate on certain motor actuated ball valves. This instrument was made by the Chief Executive Officer of Customs (CEO) in response to an application by Esso Australia Resources, and it provides that these goods are subject to a zero rate of duty under the Customs Tariff Act 1995, as opposed to the general rate of 5%. The Act applies to the goods specified in the instrument, and the instrument came into force on the day the application was lodged, 9 April 2009. The scope of the legislation is limited to the specific goods identified in the instrument and does not impose any liabilities on any person. The CEO must ensure that the application meets the core criteria set out in the Customs Act, which includes confirming that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was made. The CEO is required to publish a notice in the Gazette inviting submissions on the application, although no submissions were received in this instance. The instrument extends the application of the Customs Act to the specific goods identified, effectively providing a tariff concession for these goods.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0912098 (F2009L04248) under the Customs Act 1901 focus on the establishment of a Tariff Concession Order (TCO) for specific motor actuated ball valves. Section 269F of the Act allows an application for a TCO to be submitted to the Chief Executive Officer of Customs (CEO). If the CEO determines that the application is valid and meets the core criteria outlined in sections 269C and 269SJ, they are obligated to make a written order (section 269P(3)) that declares the specified goods to be subject to a lower rate of customs duty. In this case, the CEO made Tariff Concession Order No. 0912098 on 03 July 2009, applying to certain motor actuated ball valves, with the general rate of duty being reduced to free, down from 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by this Act on the parties involved are primarily centred around the application process and the CEO’s duty to assess and decide on the TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit submissions if they believe the TCO should not proceed. In this instance, no submissions were received. Additionally, the CEO must ensure that the core criteria, as defined in sections 269B, 269C, 269D, and 269E, are met before making the TCO. The commencement date for the TCO is the day the application was lodged, as stipulated in subsection 269S(1), which in this case was 09 April 2009. Importantly, the TCO does not affect the rights of any person except the Commonwealth, nor does it impose any liabilities on any person.
The legislation also outlines the consequences of any breach of its provisions. Although specific penalties are not detailed within the text of this explanatory statement, the Customs Act 1901 and associated regulations likely impose both civil and criminal penalties for non-compliance. Typically, breaches of customs regulations can result in fines and, in severe cases, criminal charges. The exact penalties would be determined based on the specific nature and severity of the breach, as governed by the broader customs legislation.