EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937987
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.
Valve Sales Australia applied for a TCO in respect of certain welded ball valves on 08 October 2009.
Instrument
TCO No 0937987 was made on 30 December 2009. It declares that those certain welded 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. 0937987 is taken to have come into force on 08 October 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 Tariff Concession Instrument No. 0937987, made under the Customs Act 1901, aims to provide relief on customs duties for specific goods by applying tariff concessions. Enacted in 2009, this instrument was introduced to address the need for concessional customs duties on goods where no suitable substitutes are produced within Australia, thereby supporting economic efficiency and competitiveness. The instrument was made by the Chief Executive Officer of Customs in response to an application by Valve Sales Australia for certain welded ball valves, following the legislative framework established by section 269F of the Customs Act 1901. The policy objective is to ensure that goods for which no substitutable domestic products exist are subject to reduced customs duties, thus facilitating their import and use within Australia.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the customs duty on particular goods. This concession applies to goods that do not have substitutable alternatives produced in Australia, as determined by the CEO. An application for a TCO must meet the core criteria, which include the absence of production of substitutable goods in Australia at the time of the application, and if these criteria are satisfied, the CEO is required to issue a written order specifying the lower rate of duty applicable to the goods in question. The instrument in question, TCO No. 0937987, pertains to certain welded ball valves and was registered on 30 December 2009, with the concessional duty rate taking effect from the date the application was lodged, 08 October 2009. This TCO does not affect any rights or liabilities of persons other than the Commonwealth and provides for potential duty refunds for importers under certain conditions.
Key Provisions
The primary operative sections of the Customs Act 1901, as outlined in the Explanatory Statement for Tariff Concession Instrument No. 0937987, are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not specified in section 269SJ. If the application meets the core criteria, outlined in section 269C, the CEO must make a written order (TCO) that applies a lower rate of customs duty to the goods, as per section 269P. Section 269B defines the key terms used in determining if the core criteria are met, such as 'goods produced in Australia,' 'ordinary course of business,' and 'substitutable goods.' Section 269K mandates that the CEO publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made.
The Customs Act 1901 imposes several obligations and requirements on the parties it governs. The CEO must ensure that any TCO application not pertaining to goods specified in section 269SJ is assessed to meet the core criteria, as per section 269C. If the application meets these criteria, the CEO must make a TCO, as stated in section 269P. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties, as per section 269K. The Act ensures that the TCO does not affect the rights of any person as at the date of registration, nor impose any liabilities on any person in respect of actions taken before the date of registration, as per the commencement provisions in section 269S.
The Explanatory Statement does not specify any particular offences, penalties, or civil/criminal consequences for breach of the Customs Act 1901 in the context of TCOs. However, the general legal framework implies that any non-compliance with the Act's provisions, such as making a TCO without meeting the core criteria or failing to publish the required notice in the Gazette, could lead to legal consequences. The precise nature of these consequences would depend on the specific breach and the relevant provisions of the Act and any related regulations. For example, if the CEO fails to comply with the requirements to assess an application or make a TCO when required, this could result in legal actions or penalties under the general administrative law provisions.