EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012858
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.
Dixon Asia Pacific applied for a TCO in respect of certain ball valves on 15 March 2010.
Instrument
TCO No 1012858 was made on 11 June 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. 1012858 is taken to have come into force on 15 March 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 Commonwealth Parliament, provides a framework for managing customs duties in Australia. This legislation allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, which enable the application of lower rates of customs duty on specified goods, provided certain criteria are met. The Act seeks to address the problem of ensuring fair and competitive trade by allowing for tariff concessions where appropriate, balancing the interests of businesses and consumers. The Tariff Concession Instrument No. 1012858, made on 11 June 2010, is an example of this mechanism in action, granting a tariff concession on certain ball valves and reflecting the policy objective of reducing duty rates where no substitutable goods are produced domestically.
Scope and Application
The Tariff Concession Instrument No. 1012858 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO), in this case, certain ball valves applied for by Dixon Asia Pacific on 15 March 2010. The Act governs the process by which a person can apply to the Chief Executive Officer of Customs for a TCO, provided that the goods are not those specified in section 269SJ of the Act, which are ineligible for a TCO. The application process requires the CEO to determine if the core criteria are met, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The TCO No. 1012858 was issued on 11 June 2010, declaring that the ball valves in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, with the duty rate reduced from the general 5% to free. The application of the TCO is effective from 15 March 2010, and it does not affect the rights of any person, nor does it impose any new liabilities.
Key Provisions
The main operative sections of this legislation, specifically section 269F of the Customs Act 1901, allow an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. A TCO can result in a lower rate of customs duty for the goods it applies to. The CEO must decide if the application meets the core criteria, which involves determining if substitutable goods are produced in Australia in the ordinary course of business (section 269C). 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 prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes specific obligations on the parties it governs. For instance, the CEO is required to make a decision on a TCO application as soon as practicable after it is accepted as valid. This includes publishing a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). Additionally, the CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. The CEO is also responsible for making the TCO if the core criteria are met.
Failure to comply with the provisions of this Act can result in significant consequences. Although the explanatory statement does not explicitly outline offences or penalties, breaches of the Customs Act 1901 can generally lead to civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines, while criminal penalties can result in imprisonment. The exact penalties would depend on the specific breach and the relevant sections of the Act.
In this particular case, the Tariff Concession Order No. 1012858 was made on 11 June 2010, declaring that certain ball valves are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a rate of duty of free. This TCO came into effect on the day the application was lodged, 15 March 2010, and does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person. Importers of the goods in question can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.