EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1004770
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.
Cameron Australasia Pty Ltd applied for a TCO in respect of certain valve blowout preventer parts on 27 January 2010.
Instrument
TCO No 1004770 was made on 09 April 2010. It declares that those certain valve blowout preventer parts 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. 1004770 is taken to have come into force on 27 January 2010.
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. 1004770 was enacted in 2010 under the Customs Act 1901 to provide tariff concessions for certain goods, specifically certain valve blowout preventer parts, thereby addressing the gap in duty-free access for these specific imported items. The instrument was introduced to assist in the efficient importation of these parts, which are critical for particular industries, by reducing the customs duty from the general rate of 5% to free. This initiative was enacted by the Chief Executive Officer of Customs, as mandated by the Customs Act 1901, following an application by Cameron Australasia Pty Ltd. The primary policy objective behind this concession is to support industries by ensuring that essential goods are accessible without the burden of high customs duties, thereby facilitating smoother operations and potentially lowering costs for businesses reliant on these imports.
Scope and Application
The Customs Act 1901 provides a framework for the regulation of imports and exports, with Part XVA specifically addressing Tariff Concession Orders (TCOs). These orders, issued by the Chief Executive Officer of Customs, apply to goods specified in an application where the applicant demonstrates that no substitutable goods are produced in Australia in the ordinary course of business. This legislative provision allows for the exemption of certain imported goods from the standard customs duty rates, contingent on the core criteria being satisfied. The application process requires the CEO to ensure that the goods are not specified in section 269SJ of the Act, which lists goods that are ineligible for a TCO, and that the application meets the criteria set out in sections 269C, 269D, 269E, and 269P of the Act. TCO No. 1004770, which applies to certain valve blowout preventer parts, was made on 9 April 2010, following an application by Cameron Australasia Pty Ltd on 27 January 2010. This specific TCO lowered the duty rate for these parts from the general rate of 5% to free, effective from the date of application lodging. The CEO must also publish a notice in the Gazette inviting public submissions on the application, although no submissions were received in this instance. The TCO does not affect pre-existing rights or impose liabilities on persons other than the Commonwealth, though it provides benefits to importers who may apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1004770, as referenced in the Customs Act 1901, allow the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) that provide lower rates of customs duty for specific goods. Section 269F of the Act permits an application for a TCO, and if the CEO determines that the application is valid, they must consider whether it meets the core criteria outlined in section 269C. If the application passes this assessment, a TCO is issued under section 269P(3), specifying the applicable customs duty rate for the goods in question. In this case, the CEO determined that no substitutable goods were produced in Australia for certain valve blowout preventer parts, leading to the issuance of TCO No. 1004770 on 9 April 2010, which applies to item 50 of Schedule 4 to the Customs Tariff Act 1995, setting the duty rate at free.
The obligations imposed by the Act on the parties involved include the requirement for applicants to submit a valid TCO application under section 269F, ensuring it is not for goods listed in section 269SJ, which are ineligible for TCOs. The CEO must review the application to determine if it meets the core criteria, which involves assessing whether any substitutable goods are produced in Australia as per section 269C. If the application meets these criteria, the CEO must issue a written TCO order, as mandated by section 269P(3). Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed. In this instance, no submissions were received.
The Act also outlines specific consequences for breaches. If a TCO is issued incorrectly or if an application is found to be fraudulent, there could be significant ramifications. While the explanatory statement does not detail specific penalties, general provisions in the Customs Act 1901 could apply, which might include fines or imprisonment for knowingly making false statements or misrepresentations in the application process. The TCO itself does not impose any liabilities on persons other than the Commonwealth, ensuring that rights and duties under the Act are preserved for all parties involved.