EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008671
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.
Woodside Burrup applied for a TCO in respect of certain ball valves on 18 February 2010.
Instrument
TCO No 1008671 was made on 14 May 2010. It declares that those certain 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. 1008671 is taken to have come into force on 18 February 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework within which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to lower the customs duty on specific goods. This legislation addresses the need to provide tariff relief for imported goods under certain conditions, particularly where no suitable Australian-made alternatives exist. The Customs Act 1901 aims to ensure fair and efficient trade practices by allowing for reduced duties on goods that meet specified criteria. For instance, a TCO may be issued if no substitutable goods are produced in Australia in the ordinary course of business, as per section 269C of the Act. This mechanism supports economic efficiency and competitive balance by enabling Australian businesses to import goods at a reduced cost, thus facilitating broader market access and potentially lowering consumer prices.
Scope and Application
The Tariff Concession Instrument No. 1008671 under the Customs Act 1901 applies to the concession of tariff rates for specific goods, namely certain ball valves, as applied for by Woodside Burrup. The Act applies to any entity or individual seeking tariff concessions for goods that are not produced in Australia and have no substitutable goods available domestically, as outlined in section 269C of the Act. The application process is overseen by the Chief Executive Officer of Customs, who determines whether the application meets the specified core criteria, such as the absence of substitutable goods produced in Australia. This instrument is applicable nationally across Australia, encompassing all states and territories, thereby extending its reach throughout the Commonwealth. There are, however, exclusions stipulated in section 269SJ of the Act, which lists goods that cannot be subject to a tariff concession order. The instrument's application may be further refined or expanded through subordinate instruments, as permitted by the Act.
Key Provisions
The key operative sections of the Customs Act 1901 that are relevant to the Tariff Concession Order (TCO) No 1008671 include sections 269C, 269B, 269D, 269E, 269F, 269K, 269P, 269S, and 269SJ. Section 269F allows an individual or entity to apply for a TCO for certain goods. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, as outlined in sections 269C and 269B, the CEO must make a TCO that specifies the goods and the duty rate. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions on the TCO application, while section 269S details the commencement date of the TCO.
The obligations imposed on the parties by the Act include the requirement for an applicant to submit an application for a TCO in accordance with section 269F. The CEO must review the application to determine if it meets the core criteria, as specified in section 269C. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties, as required by section 269K. Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person regarding actions taken before the TCO registration date, as outlined in section 269S.
Breaching the requirements of the Act, such as failing to adhere to the application process for a TCO or providing misleading information in an application, may lead to civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of customs legislation generally attract penalties under the Customs Act 1901 and the Crimes Act 1914. Penalties may include fines and imprisonment, with the exact penalties depending on the nature and severity of the breach.