EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912405
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 Pty Ltd applied for a TCO in respect of certain gate valves double block & bleed on 15 April 2009.
Instrument
TCO No 0912405 was made on 03 July 2009. It declares that those certain gate valves double block & bleed 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. 0912405 is taken to have come into force on 15 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 Parliament of Australia, was amended to include a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This legislative framework was introduced to address the need for a streamlined process for applying lower rates of customs duty on specific goods, provided they meet certain criteria. The objective of the scheme is to facilitate trade by making it easier for businesses to import goods that are not produced domestically and for which there are no substitutable goods produced in Australia. In line with this policy, Tariff Concession Instrument No. 0912405 was enacted on 3 July 2009, in response to an application by Esso Australia Resources Pty Ltd for a TCO on certain gate valves double block & bleed. The instrument declares that these goods are subject to a free rate of duty, which will benefit importers who can apply for a refund of duty on these goods imported since the TCO came into effect on 15 April 2009.
Scope and Application
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply to goods specified in a TCO application, provided the application meets certain core criteria, including the absence of substitutable goods produced in Australia. The Act applies to persons or entities seeking to import specific goods, with the application process requiring a demonstration that no substitutable goods are produced domestically. The geographic reach of the Act is national, as it pertains to imports entering Australia. The Act does not impose any liabilities on individuals or entities for actions taken prior to the registration of the TCO, ensuring that only future transactions are affected. While the Act sets the primary guidelines, the specifics of any tariff concessions are determined through subordinate instruments such as the TCOs, which can be tailored to particular goods and circumstances.
Key Provisions
The primary operative sections of the Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0912405, focus on the process and criteria for making Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). Specifically, section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a lower rate of duty or, in some cases, a free rate of duty (section 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, the CEO of Customs is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to submit their views (subsection 269K(1)). Secondly, the CEO must evaluate the application against the core criteria specified in section 269C. If the application meets these criteria, the CEO must issue a written TCO (section 269P(3)). Additionally, any person who considers that the TCO should not be made has the opportunity to lodge a submission with the CEO. For the TCO in question, no submissions were received.
Regarding consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for failing to comply with the provisions related to TCOs. However, the general legal framework surrounding the Act implies that any misuse or non-compliance with the terms of the TCO could result in legal actions, potentially including civil or criminal penalties as determined by the relevant courts. The penalties would depend on the nature and severity of the breach, but they could include fines, imprisonment, or other sanctions as prescribed by law.