EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0941602
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.
Heldon Products Pty Ltd applied for a TCO in respect of certain rotolock valves on 4 November 2009.
Instrument
TCO No 0941602 was made on 29 January 2010. It declares that those certain rotolock 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. 0941602 is taken to have come into force on 4 November 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. 0941602, enacted in 2010 under the Customs Act 1901, was introduced to address the specific needs of importers seeking tariff concessions for certain goods that are not produced domestically. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which lower the customs duty rates for specified goods, provided certain criteria are met. In this instance, the Instrument was created in response to an application by Heldon Products Pty Ltd for a TCO concerning rotolock valves, which were not produced in Australia at the time. The primary objective of the Instrument, as outlined in the explanatory statement, is to ensure that the rights of importers are positively impacted without imposing any disadvantages or liabilities on other parties. The tariff rate for the rotolock valves in question was reduced to free, effective from the date of the application, 4 November 2009, and no submissions were received during the consultation period, allowing the TCO to proceed without opposition.
Scope and Application
The Tariff Concession Instrument No. 0941602, made under the Customs Act 1901, applies to the concession of tariff rates for specific goods, in this case, certain rotolock valves, and is administered by the Chief Executive Officer of Customs. This legislation is applicable to any person or entity that imports or intends to import the specified goods into Australia, granting them a lower rate of customs duty as per the terms of the Tariff Concession Order (TCO). The geographic reach of this Act is national, affecting all importers across Australia. The application of the TCO is contingent upon the core criteria outlined in section 269C of the Act, ensuring that no substitutable goods are produced in Australia on the day the application was lodged. Any exclusions are defined in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act allows for extensions and restrictions of its application through subordinate instruments, ensuring flexibility in its implementation. The TCO No. 0941602 specifically exempts the affected goods from the general duty rate of 5%, setting the duty rate at free for these goods as from 4 November 2009, the date the application was lodged.
Key Provisions
The Tariff Concession Order (TCO) No. 0941602, made under section 269F of the Customs Act 1901, pertains to certain rotolock valves and declares them as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, effective from 4 November 2009 (subsection 269S(1)). This means that the general rate of duty on these valves, which is 5%, is reduced to free when the TCO applies (subsection 269P(3)). This order was made by the Chief Executive Officer of Customs (CEO) after being satisfied that no substitutable goods were produced in Australia at the time the application was lodged, as per section 269C of the Act.
The Act imposes certain obligations on the parties involved. For instance, section 269F allows any person to apply for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. Once an application is deemed valid, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, the CEO did not receive any submissions in response to the published notice.
Breach of the obligations or provisions outlined in the Customs Act 1901 may lead to various consequences. Although specific offences, penalties, or consequences are not detailed in the explanatory statement, general provisions in the Act may apply. For example, the Act may impose fines or imprisonment for contraventions related to customs duties and other breaches. The exact penalties would depend on the specific provisions contravened and the severity of the breach, as outlined in the broader Customs Act and associated regulations.