EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938776
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.
Bluescope Steel Limited applied for a TCO in respect of certain check backflow prevention valves on 14 October 2009.
Instrument
TCO No 0938776 was made on 30 Decemeber 2009. It declares that those certain check backflow prevention 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. 0938776 is taken to have come into force on 14 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework under which the Chief Executive Officer of Customs may grant Tariff Concession Orders (TCOs). These orders apply lower rates of customs duty to specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 0938776, issued under this Act, addresses a specific gap by offering tariff concessions for certain check backflow prevention valves, reducing their duty from the general rate of 5% to free. This measure was introduced in response to an application by Bluescope Steel Limited, ensuring that these goods can be imported without incurring the standard customs duty, thereby benefiting importers who can apply for duty refunds on qualifying imports. The policy objective of this concession is to facilitate the importation of these valves by lowering the financial barrier, thus potentially supporting industries reliant on such equipment.
Scope and Application
The Customs Act 1901 provides a framework for the administration of customs duties and includes mechanisms for tariff concessions. Specifically, under Part XVA, Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on certain goods. These concessions apply to entities that import goods specified in a TCO, with the primary beneficiaries being importers who can seek refunds on duties paid for goods imported after the TCO takes effect. The geographic and jurisdictional reach of this Act is national, applying across Australia, and it extends to all industries and entities involved in the importation of goods. The Act does not apply to goods specified in section 269SJ, which outlines exceptions to the tariff concession scheme. The CEO must ensure that no substitutable goods are produced in Australia before granting a TCO, as stipulated in section 269C. The process includes public consultation, as mandated by subsection 269K(1), although no submissions were received for TCO No. 0938776. This order, which came into force on 14 October 2009, specifically pertains to certain check backflow prevention valves, reducing their duty rate from 5% to free.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0938776 (section 269C) require the Chief Executive Officer of Customs (CEO) to assess whether an application for a tariff concession order (TCO) meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, they must issue a written TCO (section 269P(3)). This specific TCO No. 0938776 pertains to certain check backflow prevention valves, declaring them as goods to which a prescribed item in Schedule 4 of the Customs Tariff Act 1995 applies, with a resulting duty rate of free (section 269P(3)).
Under this legislation, the obligations primarily rest on the applicant, in this case, Bluescope Steel Limited, to submit a valid TCO application to the CEO (section 269F). The CEO, in turn, has the obligation to assess the application against the core criteria and make a decision on whether to issue a TCO (section 269C). Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any person who might have objections to the TCO to lodge a submission (subsection 269K(1)). The CEO also has the obligation to ensure that the TCO does not affect the rights of any person adversely, except for the Commonwealth, and does not impose any liabilities on anyone except the Commonwealth (subsection 269S(1)).
Breaches of the provisions of the Customs Act 1901 and associated regulations can lead to various civil and criminal consequences. For instance, knowingly importing goods in contravention of the Act or regulations may result in criminal charges and penalties such as fines or imprisonment (section 126(1)(r) of the Regulations). Additionally, failure to comply with the obligations imposed on the CEO, such as not publishing notices in the Gazette as required, may result in administrative penalties or other consequences as prescribed by law. The exact penalties for breaches depend on the specific nature and severity of the violation, with maximum penalties varying according to the particular offence.