EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1022969
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 Ltd applied for a TCO in respect of certain butterfly lugged wafer valves on 21 May 2010.
Instrument
TCO No 1022969 was made on 02 August 2010. It declares that those certain butterfly lugged wafer 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. 1022969 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 Customs Act 1901 was amended to introduce a scheme allowing for Tariff Concession Orders (TCOs) under Part XVA, which were enacted to provide relief to importers by applying a lower rate of customs duty on specific goods. This legislative change was introduced to address the gap where certain imported goods could benefit from reduced tariffs, provided they met specific criteria such as the absence of substitutable goods produced in Australia. The instrument in question, Tariff Concession Instrument No. 1022969, was enacted by the Chief Executive Officer of Customs, in accordance with section 269F of the Act, and it specifically pertains to certain butterfly lugged wafer valves. The policy objective, as stated in the explanatory statement, is to ensure that the application of the concession does not disadvantage any person and to benefit importers by potentially allowing them to apply for a refund of duties paid on these goods since the commencement date of the concession. The instrument became effective on the date the application was lodged, which was 21 May 2010.
Scope and Application
The Tariff Concession Instrument No. 1022969, made under the Customs Act 1901, applies to the specific category of goods known as certain butterfly lugged wafer valves, which are subject to a tariff concession order (TCO). This legislation is administered by the Chief Executive Officer of Customs (CEO) and is applicable to any entity or individual involved in the importation of these goods into Australia. The geographic reach of this Act is national, as it applies throughout Australia and is governed by the Commonwealth. The Act stipulates that the application for a TCO must meet core criteria, primarily that no substitutable goods are produced in Australia at the time of the application, which is essential for determining eligibility for the tariff concession. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth, ensuring that only the rights of importers are beneficially affected, such as eligibility for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 1022969) involve the application process and criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ, they must then decide if the application meets the core criteria set out in section 269C. This requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order, as stipulated in section 269P(3), declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is valid and not in respect of goods specified in section 269SJ. They must also verify that no substitutable goods were produced in Australia on the application date. Once these criteria are met, the CEO must make a written TCO order. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, no submissions were received, allowing the TCO to proceed.
For breaches of the requirements set out in the Customs Act 1901 and its associated regulations, there can be significant consequences. While specific offences and penalties are not detailed in this instrument, generally under the Customs Act, breaches can lead to both civil and criminal penalties. Civil penalties can include fines up to a significant amount, often tied to the value of the goods involved or other specified financial measures. Criminal penalties can include imprisonment, reflecting the seriousness of the breach. These penalties are intended to ensure compliance with the Act and its regulations, protecting the integrity of the customs duty system and the economic interests of the Commonwealth.