EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939654
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.
Methven Australia applied for a TCO in respect of certain pressure reducing valves on 21 October 2009.
Instrument
TCO No 0939654 was made on 04 January 2010. It declares that those certain pressure reducing 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. 0939654 is taken to have come into force on 21 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 within which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs). These orders provide for reduced rates of customs duty on specified goods. The instrument, Tariff Concession Instrument No. 0939654, was introduced to address the problem of ensuring that certain goods, in this case specific pressure reducing valves, receive duty concessions if no substitutable goods are produced in Australia. This policy objective aims to support the importation of these goods by reducing the duty burden, thereby potentially lowering costs for businesses and consumers. Methven Australia applied for this concession, and following the evaluation by the CEO, a TCO was issued on 4 January 2010, making the specified valves duty-free. This TCO became effective from the date of the application, 21 October 2009, and did not disadvantage any parties or impose new liabilities on them.
Scope and Application
The Tariff Concession Instrument No. 0939654 applies to the importation of certain pressure reducing valves, specifically as designated by Methven Australia in their application dated 21 October 2009. This instrument pertains to the Customs Act 1901, under which the Chief Executive Officer of Customs (CEO) has the authority to issue Tariff Concession Orders (TCOs). The CEO's decision to grant the TCO was based on the assessment that no substitutable goods were produced in Australia at the time of the application. This TCO provides a lower customs duty rate for these specific valves, effectively reducing the duty from the general rate of 5% to a free rate. The application of this concession is limited to the geographic jurisdiction of Australia, and it applies to the importation of goods covered by the instrument. There were no exclusions or exemptions applied in this instance, and the instrument does not specify any thresholds. The application of the TCO is subject to the conditions outlined in the Customs Act 1901, and it can be further defined or extended through subordinate instruments as required.
Key Provisions
The key operative sections of this legislation are sections 269F, 269C, 269P, and 269S. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P requires that if the CEO is satisfied that the application meets the core criteria, a written order (a TCO) must be made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Finally, section 269S provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The obligations and requirements imposed by the Act on the parties governed by it include the need for a TCO application to be made in accordance with section 269F. This means that an application must be submitted to the CEO by a person who wishes to have a lower rate of customs duty applied to certain goods. The CEO must then assess the application to determine if it meets the core criteria outlined in section 269C. If the application meets these criteria, the CEO must make a written TCO as per section 269P. Additionally, subsection 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO.
Failure to comply with the requirements of the Customs Act 1901 may result in legal consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breaches, the Act does allow for the imposition of penalties for non-compliance with its provisions. Under Australian law, penalties for breaches of customs regulations can include fines and, in severe cases, imprisonment. The maximum penalties for breaches of customs legislation can vary widely depending on the nature and severity of the offence. For instance, civil penalties can range from monetary fines up to several thousand dollars, while criminal penalties can include fines of up to $22,200 and/or imprisonment for up to five years for serious offences.