EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1019063
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.
Gea Process Engineering applied for a TCO in respect of certain butterfly split containment valves on 27 April 2010.
Instrument
TCO No 1019063 was made on 19 July 2010. It declares that those certain butterfly split containment 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. 1019063 is taken to have come into force on 27 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the import and export of goods in Australia, including the imposition of customs duties. The Act provides a framework for the application and assessment of Tariff Concession Orders (TCOs), which can reduce the rate of customs duty on specified goods. The Tariff Concession Instrument No. 1019063 was introduced on 19 July 2010 to address the need for tariff concessions on certain butterfly split containment valves, as applied for by Gea Process Engineering on 27 April 2010. The policy objective of this instrument was to provide tariff concessions where no substitutable goods were produced in Australia, thereby encouraging the importation of these specific goods without imposing additional duties. The instrument came into force on the same date the application was lodged, ensuring that the rights of importers were protected and potentially benefiting them with a refund of duties paid on these goods since the commencement date.
Scope and Application
The Tariff Concession Instrument No. 1019063 under the Customs Act 1901 applies to specific goods, namely certain butterfly split containment valves, which are now exempt from customs duty as per the order. This legislation facilitates tariff concessions for goods that are not produced in Australia and for which there are no substitutable goods available domestically. The application of this instrument is overseen by the Chief Executive Officer of Customs, who must determine whether the application for a Tariff Concession Order (TCO) meets the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia. The TCO extends to the entire Commonwealth of Australia and applies to the goods specified in the order. The application process includes a period for public consultation, although in this case, no submissions were received. The TCO came into effect on the date the application was lodged, 27 April 2010, and does not impose any liabilities on persons other than the Commonwealth, instead benefiting importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date.
Key Provisions
The Tariff Concession Instrument No. 1019063 under the Customs Act 1901 (the Act) involves the application of a Tariff Concession Order (TCO) to certain butterfly split containment valves. Specifically, section 269F of the Act allows for an application to the Chief Executive Officer of Customs (the CEO) for a TCO. If the application is deemed valid and meets the core criteria outlined in section 269C, the CEO must make a written order, as stipulated in subsection 269P(3). This TCO, No. 1019063, made on 19 July 2010, declares that the specified valves are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods.
Entities applying for a TCO must ensure that no substitutable goods were produced in Australia on the date the application was lodged, as defined in section 269D (goods produced in Australia) and section 269E (ordinary course of business). The CEO must also be satisfied that the goods are not those specified in section 269SJ, which are ineligible for a TCO. Upon meeting these criteria, the CEO must proceed to make the TCO, as per the requirements in section 269P(3).
Parties involved in the application and enforcement of a TCO are subject to certain obligations. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO, as per subsection 269K(1). In this case, no submissions were received. Furthermore, the TCO comes into effect on the day the application is lodged, as stated in subsection 269S(1), which for TCO No. 1019063 was 27 April 2010. The rights of importers will be positively affected, as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Any breach of the provisions under the Customs Act 1901 may result in civil or criminal consequences. The specific penalties for such breaches are not detailed in the explanatory statement but typically involve fines and potential imprisonment depending on the severity of the offence. The Act and associated regulations mandate compliance and stipulate consequences for non-compliance, ensuring that the legislative intent is upheld and enforced effectively.