EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0945229
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.
Reliance Worldwide applied for a TCO in respect of certain motor driven ball valves on 30 November 2009.
Instrument
TCO No 0945229 was made on 26 February 2010. It declares that those certain motor driven 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. 0945229 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be made to provide duty concessions on certain goods. These concessions are intended to support industries by reducing the cost of imported goods, provided they are not substitutable by Australian-made products. The Act was introduced to address economic and competitive issues by facilitating the import of goods that would otherwise be prohibitively expensive due to high customs duties. The explanatory statement for Tariff Concession Instrument No. 0945229, made on 26 February 2010, indicates that this instrument was introduced to provide a tariff concession for certain motor driven ball valves, following an application by Reliance Worldwide on 30 November 2009. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for the concession. As a result, the instrument declares that these specific goods are subject to a free rate of duty, down from the general rate of 5%, effective from the date the application was lodged. This measure aims to enhance the competitiveness of Australian businesses by reducing the cost of necessary imported goods.
Scope and Application
The Tariff Concession Instrument No. 0945229 under the Customs Act 1901 applies to any person or entity seeking tariff concessions for specific goods imported into Australia. The application of this legislation is geographically confined to the Commonwealth of Australia and affects the importation of certain motor driven ball valves. The Act provides for tariff concessions through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs, provided that the goods in question are not specified in section 269SJ of the Act and that no substitutable goods are produced in Australia at the time of the application. The scope of the Act is further delineated by the criteria set out in sections 269C, 269B, and 269D, ensuring that the concessions are granted only when there is no domestic production of similar goods. The instrument does not extend to any goods specified as ineligible under the Act, nor does it impose any liabilities or affect the rights of any person other than the Commonwealth. The TCO itself became effective from the date of the application, 30 November 2009, and it allows for the zero-rating of the specified goods, which otherwise carry a 5% duty rate.
Key Provisions
The main operative sections of the Customs Act 1901, particularly section 269F (subsection 269P(3)), outline the process for applying for a Tariff Concession Order (TCO) and the conditions under which the Chief Executive Officer of Customs (CEO) may grant such an order. Specifically, section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D (goods produced in Australia), 269E (ordinary course of business) and 269F (substitutable goods). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a lower rate of duty as specified in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved primarily revolve around the application process and the conditions for granting a TCO. The applicant, such as Reliance Worldwide in this case, must ensure that their application is made in accordance with section 269F, and the CEO must assess whether the application meets the core criteria outlined in section 269C. Additionally, the CEO must publish a notice in the Gazette under subsection 269K(1) inviting any interested party to submit objections to the TCO, although in this instance, no submissions were received. Once a TCO is granted, the CEO must ensure that the new duty rate applies as specified in the order.
There are no specific offences or penalties outlined for breach of the Act in the context of TCO applications. However, non-compliance with the terms of the TCO or other customs regulations could potentially lead to civil or criminal consequences, including fines or imprisonment, under other sections of the Customs Act 1901 or related legislation. For instance, offences such as fraud or misrepresentation in the context of customs duties could incur penalties as prescribed by the Act. In this case, since the TCO No. 0945229 simply reduces the duty rate and does not impose new liabilities, the primary risk of non-compliance would be related to improper application of the reduced duty rate or failure to comply with other customs regulations.