EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0948583
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 brass ball valves on 14 December 2009.
Instrument
TCO No 0948583 was made on 26 February 2010. It declares that those certain brass 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. 0948583 is taken to have come into force on 14 December 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 Commonwealth Parliament, establishes a framework for the imposition of customs duty on imported goods. In addressing the need to provide tariff concessions on certain goods to encourage fair competition and economic efficiency, the Act was supplemented by the introduction of Tariff Concession Orders (TCOs) under Part XVA. This mechanism allows the Chief Executive Officer of Customs to apply reduced rates of customs duty on specified goods, provided that no substitutable goods are produced in Australia. This legislative instrument, F2010L01462, was enacted to provide a tariff concession for certain brass ball valves, recognising the absence of Australian production of substitutable goods and thereby reducing the duty rate from the general 5% to free, effective from the date the application was lodged. The policy objective is to support importers by reducing their duty liabilities and potentially encouraging the importation of these goods.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, which allow for lower customs duty rates on specified goods. These orders apply to entities or individuals importing goods that meet the criteria set out in the Act. Specifically, a TCO can be applied for under section 269F if the goods are not specified in section 269SJ, which lists goods ineligible for tariff concessions. A TCO application is deemed to meet the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO is satisfied with the application, they must issue a TCO as per section 269P(3), specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995. This instrument is applicable across the Commonwealth of Australia and affects importers who can benefit from reduced duty rates on specified goods, with no retroactive application to actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0948583, made under the Customs Act 1901, establishes a concession for customs duty on certain brass ball valves (section 269F). If the Chief Executive Officer of Customs (CEO) is satisfied that no substitutable goods are produced in Australia, they must issue a Tariff Concession Order (TCO) to apply a lower rate of duty, or in this case, free duty on the specified goods (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not proceed, although in this instance, no submissions were received (subsection 269K(1)). The TCO came into force on the date the application was lodged, 14 December 2009 (subsection 269S(1)), and does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date.
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must apply to the CEO, ensuring the goods do not fall under the categories specified in section 269SJ of the Act, which are ineligible for a TCO (section 269F). The CEO must then assess whether the application meets the core criteria, which requires verifying that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged (section 269C). If the CEO finds the application meets the criteria, they are mandated to issue a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette to allow for any objections, though in this case, no objections were lodged (subsection 269K(1)).
The Customs Act 1901 also sets out consequences for breaches related to TCOs. While the explanatory statement does not specify particular offences under this TCO, the Act generally provides for penalties for non-compliance with customs regulations. These penalties can include fines and imprisonment for serious offences, as outlined in the Act and other relevant legislation. For instance, knowingly making a false statement in a customs document could result in penalties under section 235 of the Customs Act, which may include fines up to $22,000 or imprisonment for up to five years, or both, for individuals, and higher penalties for corporations.
In summary, the Tariff Concession Instrument No. 0948583 grants a tariff concession for certain brass ball valves, reducing the duty from 5% to free. The CEO is required to assess applications against specific criteria and publish notices in the Gazette to allow for objections. While the explanatory statement does not detail specific penalties for this TCO, general penalties for breaches of customs regulations include fines and imprisonment.