EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1022803
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.
Origin Energy Resources applied for a TCO in respect of certain ball valves on 21 May 2010.
Instrument
TCO No 1022803 was made on 02 August 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. 1022803 is taken to have come into force on 21 May 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. 1022803, enacted in 2010, amends the Customs Act 1901 to provide tariff concessions for certain ball valves, specifically those applied for by Origin Energy Resources. This instrument addresses the gap in the tariff structure for goods that do not have Australian substitutes and aims to support industries by lowering the customs duty on specified imports. Enacted by the Parliament of Australia, the policy objective is to ensure fair trade practices and provide economic benefits to businesses by reducing the cost of importing certain goods. The instrument operates under the existing framework of Tariff Concession Orders, which are designed to facilitate the importation of goods that are not produced domestically, thereby encouraging competition and efficiency in the market.
Scope and Application
The Customs Act 1901, specifically as it relates to Part XVA, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) that provide for a lower rate of customs duty on specified goods. The application process for such a concession requires an application to be submitted to the CEO, who must then determine if the application meets the core criteria set out in the Act. This involves confirming that no substitutable goods are produced in Australia in the ordinary course of business. The instrument, TCO No 1022803, pertains to certain ball valves applied for by Origin Energy Resources and was made on 21 May 2010. The TCO applies to these ball valves, granting them a free duty rate as opposed to the general rate of 5%, effective from the date of application lodging. The Act mandates the CEO to publish a notice in the Gazette inviting submissions from any interested parties; however, in this instance, no submissions were received. The TCO does not affect any pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The key operative sections of the Customs Act 1901, specifically relating to Tariff Concession Orders (TCOs), include section 269C, which defines the core criteria for an application to be successful (s 269C). This criterion stipulates that no substitutable goods should be produced in Australia on the day the application is lodged. Section 269P(3) outlines the procedure for the Chief Executive Officer (CEO) to make a written order if the application meets the core criteria (s 269P(3)). Section 269K(1) mandates the publication of a notice in the Gazette inviting submissions on the application, although in this instance, no submissions were received (s 269K(1)). Lastly, subsection 269S(1) indicates that a TCO comes into effect on the day the application is lodged (s 269S(1)).
The Act imposes specific obligations on both applicants and the CEO. For applicants, the primary obligation is to ensure their application for a TCO is made under the correct circumstances, specifically that no substitutable goods are being produced in Australia (s 269C). The CEO, on the other hand, is required to assess whether the application meets the core criteria and, if so, to issue a written TCO (s 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from the public, although in this case, no submissions were received (s 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on them for actions taken prior to the TCO's effective date (s 269S(1)).
The Customs Act 1901 does not explicitly detail specific offences, penalties, or civil/criminal consequences for breaches of the TCO provisions within the explanatory statement. However, the general framework of the Act suggests that non-compliance with customs regulations, including TCOs, could lead to penalties under the broader customs laws. These penalties could include fines or other sanctions as prescribed under the Customs Act 1901 and associated regulations. The specific penalties would depend on the nature and severity of the breach, but they could potentially include significant financial penalties or other enforcement actions as deemed appropriate by the relevant authorities.