EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939172
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.
Isotec Australia Pty Ltd applied for a TCO in respect of certain combined test plug and isolating angle valves on 19 October 2009.
Instrument
TCO No 0939172 was made on 08 January 2010. It declares that those certain combined test plug and isolating angle 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. 0939172 is taken to have come into force on 19 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 was enacted by the Australian Parliament to provide a comprehensive framework for the administration of customs duties and the regulation of imports and exports within Australia. The Act was introduced to address the need for a structured approach to customs duties and the regulation of international trade, ensuring that the government could effectively collect revenue and control the flow of goods across borders. One of the mechanisms provided by the Customs Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duties on certain goods. This is particularly useful in promoting trade and industry by lowering the cost of imported goods that have no local substitutes. The Tariff Concession Instrument No. 0939172, made under the authority of the Customs Act, exemplifies this by granting a tariff concession for certain combined test plug and isolating angle valves, reducing the duty from 5% to free, thereby facilitating easier access to these goods and potentially benefiting Australian businesses that rely on these imports.
Scope and Application
The Tariff Concession Instrument No. 0939172 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain combined test plug and isolating angle valves, which benefit from a lower rate of customs duty. The legislation is enacted at the Commonwealth level and is applicable to entities importing these specific goods into Australia. The application of this Act is limited to goods for which no substitutable alternatives are produced domestically, as defined by the Act, and which meet the criteria set out in the Customs Tariff Act 1995. The CEO of Customs must be satisfied that the application for a tariff concession order meets these core criteria before a concession can be granted. The instrument does not extend to any other goods or entities unless specifically included in a subsequent order, and there are no exemptions specified beyond those already outlined in section 269SJ of the Customs Act. The commencement of this instrument is effective from the date the application was lodged, 19 October 2009, and it does not impose any liabilities or affect rights as at the date of registration for actions taken prior to its effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0939172 include sections 269C, 269D, 269E, 269F, 269P, and 269S of the Customs Act 1901, which set out the conditions under which Tariff Concession Orders (TCOs) can be made. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods. The CEO must decide if the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the application meets these criteria, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions on the application (subsection 269K(1)). TCO No. 0939172, made on 8 January 2010, applies to certain combined test plug and isolating angle valves, declaring them to be subject to a free duty rate as no substitutable goods were produced in Australia.
The Customs Act 1901 imposes several obligations and requirements on the parties involved in the process of applying for and granting a TCO. The CEO is required to assess applications for TCOs against the core criteria set out in the Act. This includes verifying that no substitutable goods are produced in Australia, as defined by sections 269D, 269E, and 269F. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO must proceed to grant the TCO if the application meets the core criteria. Importers and applicants must provide all necessary information and documentation to support their applications to ensure they comply with the Act's requirements.
Under the Customs Act 1901, breaches of the provisions related to TCOs can result in various civil and criminal consequences. While the Act does not specify penalties for failing to comply with the TCO process, general provisions in the Customs Act 1901 can apply. For example, making false statements or representations in an application can lead to criminal charges under section 238, which carries a maximum penalty of 10 years imprisonment. Additionally, any failure to comply with the notice publication requirement can result in administrative penalties or other legal actions. The Act also includes provisions for the recovery of duties and penalties, which can be pursued in civil courts.
The Tariff Concession Instrument No. 0939172, which grants free duty status to certain combined test plug and isolating angle valves, came into force on 19 October 2009, the date on which the application was lodged (subsection 269S(1)). This date is significant because it determines the retroactive effect of the concession, allowing importers to apply for a refund of duty paid on imports of these goods since that date (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or imposed with new liabilities due to the concession.