EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912099
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 pneumatically actuated ball valves on 09 April 2009.
Instrument
TCO No 0912099 was made on 03 July 2009. It declares that those certain pneumatically 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. 0912099 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 Commonwealth Parliament, establishes a framework for customs duties in Australia, including provisions for Tariff Concession Orders (TCOs) under Part XVA. The objective of these concessions is to lower the customs duty on certain goods, provided that there are no substitutable goods produced in Australia. The Customs Act 1901 allows for the Chief Executive Officer of Customs (CEO) to make TCOs if an application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This mechanism aims to support Australian industries by reducing the duty on imported goods where local production is not viable. The process includes an opportunity for public consultation, ensuring transparency and fairness in the decision-making process.
Scope and Application
The Tariff Concession Instrument No. 0912099, issued under the Customs Act 1901, applies to certain pneumatically actuated ball valves for which Esso Australia Resources has sought and received a Tariff Concession Order (TCO). This instrument was enacted to provide a lower rate of customs duty for these goods, specifically reducing the duty from the general rate of 5% to free. The application of the TCO is confined to the goods specified in the order, and it is contingent upon the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The TCO’s geographic reach is national, applying across Australia. The legislation does not extend to any goods specified in section 269SJ of the Customs Act, which lists those goods that cannot be subject to a TCO. The TCO’s application is governed by the provisions of the Customs Act 1901 and the Customs Tariff Act 1995, and it does not affect the rights of any person, except to the benefit of importers who may apply for a refund of duty on goods imported since the TCO’s effective date.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0912099, under the Customs Act 1901 (the Act), concern the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) (sections 269C and 269P(3)). Section 269C specifies the core criteria that a TCO application must meet, which primarily involves the absence of substitutable goods produced in Australia at the time of application. Section 269P(3) mandates that if these core criteria are met, the CEO must issue a written TCO. In this instance, Instrument TCO No. 0912099 applies to certain pneumatically actuated ball valves, declaring them as goods to which a specific item in the Customs Tariff Act 1995 applies, effectively setting their duty rate at free, down from the general rate of 5%.
The obligations imposed by the Act on the parties involved, particularly the CEO, include the requirement to evaluate the TCO application against the core criteria (section 269C) and to issue a written order if these criteria are satisfied (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties who believe the TCO should not proceed. In this case, no submissions were received in response to the published notice, thereby facilitating the issuance of TCO No. 0912099. Additionally, the Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and that no new liabilities are imposed on any person due to the TCO (subsection 269S(1)).
In terms of breaches and penalties, the Act does not specify particular offences or penalties directly associated with the issuance or non-compliance with a TCO. However, general provisions of the Customs Act 1901 and related regulations may apply to breaches involving the importation or exportation of goods, including potential penalties for non-compliance with customs laws. For instance, under the Customs Act, penalties can include fines and imprisonment for offences such as fraudulent importation or exportation activities. These penalties can vary significantly depending on the severity and nature of the offence, as well as any applicable regulations.