EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014827
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.
Fluid Products applied for a TCO in respect of certain brass ball valves on 26 March 2010.
Instrument
TCO No 1014827 was made on 18 June 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. 1014827 is taken to have come into force on 26 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 Tariff Concession Instrument No. 1014827 was enacted in 2010 under the Customs Act 1901. This legislation provides for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on specific goods, thereby addressing the issue of excessive tariffs on certain imported products that have no local alternatives. The Chief Executive Officer of Customs has the authority to make these orders, provided the application meets the core criteria, specifically that no substitutable goods are produced in Australia. The Customs Act 1901 facilitates this by allowing for the declaration of certain goods as subject to a lower duty rate once it is determined that they do not have local counterparts. This legislative framework aims to support industries by reducing the cost of imported goods that are not produced domestically, thus promoting competitive pricing and potentially encouraging local manufacturing in the long term.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty to certain goods. This legislation applies to individuals and entities that seek to import goods and benefit from reduced duty rates, provided these goods are not specified in section 269SJ as ineligible for a TCO. The Act extends its application across the Commonwealth of Australia, impacting the importation process nationwide. Exclusions from the TCO scheme are clearly defined in section 269SJ, which lists goods that cannot be subject to a TCO. The Act also provides that a TCO will apply retroactively from the date the application was lodged, under subsection 269S(1), and ensures that no existing rights or liabilities are adversely affected by the issuance of a TCO. The CEO is required to consult with the public through a Gazette notice under subsection 269K(1), although in this instance, no submissions were received.
Key Provisions
The Tariff Concession Order No. 1014827, under section 269F of the Customs Act 1901, allows for the application for tariff concessions on certain goods, in this case, brass ball valves, as applied for by Fluid Products on 26 March 2010. The order was made on 18 June 2010, declaring that the specified brass ball valves are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that the general duty rate of 5% on these goods is reduced to free. The effectiveness of the order is contingent upon the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods were produced in Australia on the date the application was lodged, as outlined in section 269C.
The obligations imposed by the Customs Act 1901 on parties or entities governed by the Act include the requirement for applicants to ensure their applications meet the core criteria specified in section 269C. For the CEO, the obligations include the necessity to publish a notice in the Gazette inviting submissions from interested parties after accepting a TCO application as valid, as stipulated in subsection 269K(1). Moreover, the CEO must make a written order if the application meets the core criteria, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per subsection 269P(3).
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. Section 269L of the Act outlines that a person who contravenes the Act is liable to a penalty, which can be significant and is determined according to the severity of the breach. In the context of Tariff Concession Orders, while specific offences are not detailed in the explanatory statement, general penalties for breaches of the Customs Act 1901 can include fines up to a substantial amount and, in severe cases, imprisonment. The precise penalties depend on the nature and extent of the breach, but they serve to enforce compliance and uphold the integrity of the tariff concession scheme.