EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017964
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.
Capgemini Business Services Australia Pty Ltd applied for a TCO in respect of certain spindle grease pump check valves on 20 April 2010.
Instrument
TCO No 1017964 was made on 02 July 2010. It declares that those certain spindle grease pump check 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. 1017964 is taken to have come into force on 20 April 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. 1017964, enacted in 2010, amends the Customs Act 1901 by introducing a tariff concession order for certain spindle grease pump check valves, which were the subject of an application by Capgemini Business Services Australia Pty Ltd. The Customs Act 1901, as part of its regulatory framework, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can apply lower rates of customs duty to specified goods. This legislative instrument was introduced to address the need for tariff concessions on specific imported goods, ensuring that these goods are not subject to customs duty when no suitable Australian-made alternatives exist. The instrument was created following a process of application and review, wherein the CEO of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO. The policy objective of this legislation is to facilitate trade by reducing the cost of importing certain goods, thereby benefiting importers and potentially enhancing the competitiveness of industries that utilise these components.
Scope and Application
The Tariff Concession Instrument No. 1017964 under the Customs Act 1901 applies specifically to the customs duty concessions for certain spindle grease pump check valves. This instrument was made by the Chief Executive Officer of Customs after determining that no substitutable goods were produced in Australia, thus meeting the core criteria outlined in the Act. The application for a Tariff Concession Order (TCO) was made by Capgemini Business Services Australia Pty Ltd, and the instrument came into force on the date of the application, 20 April 2010. The geographic scope of this legislation is national, as it pertains to the customs duties governed under Australian federal law. It is noteworthy that this TCO does not retroactively affect the rights of any person, including the Commonwealth, nor does it impose any liabilities on individuals or entities other than the Commonwealth, ensuring that the rights of importers will be positively affected by the duty-free status of the specified goods. Any exclusions or limitations are dictated by the provisions in the Customs Act 1901 and the Customs Tariff Act 1995, with the application of the TCO being further defined by subordinate instruments as necessary.
Key Provisions
The primary operative sections of this legislation revolve around the Customs Act 1901 (section 269F) and its provisions for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. The CEO must then determine if the application meets the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO is required to issue a written order (section 269P(3)) that effectively applies a lower customs duty rate to the goods specified in the TCO. For instance, in TCO No. 1017964, certain spindle grease pump check valves were granted a free rate of duty, down from the general rate of 5%.
The Act imposes certain obligations on the CEO and the applicant. The CEO must decide if the application meets the core criteria (section 269C) and must issue a TCO if the criteria are satisfied. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received, allowing the TCO to proceed. The applicant, on the other hand, must provide sufficient information for the CEO to determine whether the application meets the core criteria. Capgemini Business Services Australia Pty Ltd fulfilled this requirement by applying for the TCO on 20 April 2010.
There are no explicit offences, penalties, or civil/criminal consequences outlined in this legislation for breaches of the TCO provisions. However, the legislation ensures that the rights of individuals, apart from the Commonwealth, are not adversely affected by the TCO. This means that no new liabilities are imposed on anyone, and existing rights as of the date of registration are preserved. Importers can benefit from this by applying for a refund of duty on goods imported since the TCO was deemed to come into force, as per paragraph 126(1)(r) of the Regulations. This legal framework thus ensures that the TCO operates within a clear, protective boundary that safeguards existing rights and imposes no new liabilities.