EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925824
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.
Reliance Worldwide applied for a TCO in respect of certain tempering valve parts on 21 July 2009.
Instrument
TCO No 0925824 was made on 02 October 2009. It declares that those certain tempering valve parts 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. 0925824 is taken to have come into force on 21 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 Australian Parliament, introduces a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This mechanism addresses the problem of ensuring that certain imported goods receive tariff concessions, provided no suitable substitute products are manufactured domestically. A TCO reduces the customs duty on specified goods, thereby making them more competitively priced. The explanatory statement outlines that this particular instrument, Tariff Concession Instrument No. 0925824, was issued following an application by Reliance Worldwide for tempering valve parts. The CEO found that no substitutable goods were produced in Australia, leading to a tariff concession that lowered the duty from the general rate of 5% to free. The instrument's policy objective is to facilitate the import of goods that are not produced domestically, ensuring market access and potentially lowering costs for consumers and businesses alike.
Scope and Application
The Tariff Concession Instrument No. 0925824 under the Customs Act 1901 provides for the application of a tariff concession order (TCO) for specific tempering valve parts, effectively reducing the customs duty from the general rate of 5% to free. This legislation applies to any person who has applied for a TCO in respect of the specified goods, ensuring that the application process adheres to the criteria outlined in the Act. The instrument, which came into force on the date the application was lodged (21 July 2009), allows for the concession to be granted if the Chief Executive Officer of Customs is satisfied that no substitutable goods are produced in Australia and that the application meets the core criteria. The TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities, thereby protecting individuals and entities from any disadvantage or new obligations stemming from the concession.
Key Provisions
The main operative sections of this legislation include section 269C, which outlines the core criteria for a Tariff Concession Order (TCO) application. Specifically, section 269C states that a TCO application will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C(1)). Section 269B further defines key terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ (section 269B(1)). Additionally, subsection 269P(3) requires the Chief Executive Officer of Customs (CEO) to make a written order if satisfied that the TCO application meets the core criteria. In this case, TCO No. 0925824 was made on 2 October 2009, declaring that certain tempering valve parts are goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)).
The Customs Act 1901 imposes obligations on applicants and the CEO. An applicant must submit a valid TCO application to the CEO, ensuring it meets the core criteria as defined in section 269C. The CEO has the duty to assess the application, publish a notice in the Gazette inviting submissions, and make a decision based on the application and any submissions received. If the CEO is satisfied that the application meets the core criteria, they must make a written order (TCO) (subsection 269P(3)). Furthermore, the CEO is required to ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of anything done or omitted before the date of registration (subsection 269S(1)).
Breach of the obligations and requirements under the Customs Act 1901 can lead to various consequences. For example, if the CEO fails to follow the statutory process for making a TCO, this could potentially be challenged in court, leading to judicial review. However, the explanatory statement does not specify particular offences, penalties, or consequences for breaches. Generally, under Australian law, breaches of statutory obligations can result in civil or criminal penalties depending on the nature and severity of the breach. The maximum penalties would be determined by the specific provisions of the relevant legislation and the court's discretion. In this context, it is crucial for both applicants and the CEO to adhere strictly to the requirements set out in the Act to avoid any potential legal repercussions.