EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923078
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.
Methven Australia Pty Ltd applied for a TCO in respect of certain non return and isolating valves on 3 July 2009.
Instrument
TCO No 0923078 was made on 21 September 2009. It declares that those certain non return and isolating 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 10%. 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.
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. 0923078 is taken to have come into force on 3 July 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, includes provisions for Tariff Concession Orders (TCOs) to provide reduced customs duty on certain imported goods, thus promoting trade efficiency and economic benefits. Specifically, the Act allows for the application of lower duty rates on goods for which no domestic equivalent is produced, thereby encouraging the importation of goods that are not locally manufactured. The explanatory statement for Tariff Concession Instrument No. 0923078, enacted in 2009, highlights that this instrument aims to provide tariff concessions on specific non-return and isolating valves, which were subject to a general duty rate of 10%. However, the instrument sets the duty rate for these goods to free, provided that no substitutable goods are produced in Australia, thus aligning with the core criteria outlined in the Act. This legislative action facilitates smoother importation processes and supports the policy objective of ensuring that Australian consumers and businesses have access to competitively priced goods.
Scope and Application
The Tariff Concession Instrument No. 0923078 pertains to the Customs Act 1901, specifically addressing Tariff Concession Orders (TCOs) which lower the customs duty on certain goods. This legislation applies to entities such as Methven Australia Pty Ltd that may apply for a TCO if they can demonstrate that the goods in question are not produced in Australia in the ordinary course of business and that there are no substitutable goods available domestically. The Act applies on a national level, as it is part of the Commonwealth’s legislative framework. Exemptions under the Act include goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of the Act can be extended or modified through subordinate instruments, ensuring flexibility and responsiveness to changing economic conditions or market needs. The Tariff Concession Instrument No. 0923078 came into effect on 3 July 2009, the date the application for the concession was lodged, and it does not disadvantage any person or impose liabilities on anyone for actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in this Tariff Concession Order (TCO) Instrument, are sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO, with the CEO required to make a written order if the application meets the core criteria outlined in section 269C. This means that if no substitutable goods are being produced in Australia on the day the application is lodged, the CEO must make the order. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269B, 269D, and 269E. Once the CEO is satisfied that the application meets these criteria, they must declare in the TCO that the goods in question are subject to a specific rate of duty, as specified in Schedule 4 to the Customs Tariff Act 1995. The TCO in question, TCO No. 0923078, was made on 21 September 2009, and it applies to certain non return and isolating valves, which are now subject to a duty rate of free, down from the general rate of 10%.
The Act imposes certain obligations on the parties involved, primarily ensuring that applications for TCOs are made in accordance with the specified criteria. The CEO must review applications to determine if they meet the core criteria set out in section 269C. If the CEO decides to make a TCO, they must publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made, as per section 269K. Additionally, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose any liabilities on any person, as outlined in section 269S.
Failure to comply with the requirements of the Customs Act 1901 regarding TCOs may result in various civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Act could potentially lead to legal actions, including fines or other penalties as prescribed by the relevant legislation. The Act's provisions are designed to ensure that TCOs are made fairly and in accordance with the criteria outlined in the legislation.