EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0926550
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 non return and pressure relief valve parts on 24 July 2009.
Instrument
TCO No 0926550 was made on 02 October 2009. It declares that those certain non return and pressure relief 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. 0926550 is taken to have come into force on 24 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 Parliament of Australia, establishes a framework within which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to provide relief from customs duty on certain goods. This Act addresses the issue of ensuring that certain goods that are not produced in Australia receive tariff concessions, thereby promoting trade and potentially reducing costs for businesses importing these goods. The Tariff Concession Instrument No. 0926550, made on 2 October 2009, applies this framework to certain non return and pressure relief valve parts, declaring them to be subject to a free rate of duty as of 24 July 2009, the date the application was lodged. The process for making this decision involved satisfying the core criteria set out in the Act, including ensuring that no substitutable goods were produced in Australia at the time of application. The instrument was made without any submissions opposing it, and it has the effect of potentially benefiting importers by allowing them to apply for a refund of duty paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) which provide for a lower rate of customs duty on certain goods. This legislative framework applies to individuals or entities who wish to apply for a TCO for goods not produced in Australia in the ordinary course of business and not specified in section 269SJ of the Act. The application process requires the CEO to assess whether the goods meet the core criteria, notably whether substitutable goods are not produced in Australia, and if the application is valid, the CEO must issue a TCO. The geographic reach of this legislation is national, impacting customs duties across Australia. The application of TCOs is further refined by the Customs Tariff Act 1995, where specific tariff rates are prescribed. Subordinate instruments may extend or restrict the application of these Acts, although specific examples are not detailed in the provided text. Importantly, TCOs do not affect the rights of any person as at the date of registration and do not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0926550 under the Customs Act 1901 (section 269F) provides the operational framework for applying and processing Tariff Concession Orders (TCO). An application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO) by any person (section 269F). For a TCO to be considered, the goods in question must not be those specified in section 269SJ of the Act, which are ineligible for tariff concessions. If the CEO determines that the application meets the core criteria, a TCO will be issued, effectively reducing the customs duty on the specified goods. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia on the day the application was lodged, thus fulfilling the requirements of section 269C.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must ensure that the application complies with the criteria set forth in the Act. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit any objections to the proposed TCO (subsection 269K(1)). If no objections are received, the CEO must proceed to make the TCO. For applicants, the obligation is to provide all necessary information and evidence to support their application, ensuring it meets the criteria for a TCO. Importers who benefit from the TCO have the obligation to apply for any applicable duty refunds under the Customs Act Regulations (subsection 126(1)(r)).
Failure to comply with the requirements set out in the Customs Act 1901 may result in various civil and criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally may incur penalties such as fines and, in severe cases, imprisonment. The maximum penalties for customs-related offences can vary but often include significant fines, reflecting the seriousness of non-compliance with customs legislation. Additionally, any misrepresentation or providing of false information in a TCO application could lead to further legal repercussions, including prosecution and additional penalties.