EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1030735
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.
Reliance Worlwide Pty Ltd applied for a TCO in respect of certain isolating non return valves on 07 July 2010.
Instrument
TCO No 1030735 was made on 29 September 2010. It declares that those certain isolating non return 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. 1030735 is taken to have come into force on 07 July 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 the mechanism for Tariff Concession Orders (TCOs) through Part XVA, which allows for the application of lower rates of customs duty on certain goods. Enacted by the Australian Parliament, this legislative amendment was designed to address the gap in tariff concessions for imported goods that do not have domestic substitutes, thereby supporting Australian industries and consumers by potentially reducing the cost of imported goods. The explanatory statement for Tariff Concession Instrument No. 1030735, made in 2010, clarifies the process and criteria for such concessions. In this instance, the instrument declared that certain isolating non-return valves are subject to a free rate of duty, as no substitutable goods were produced in Australia, which aligns with the policy objective of promoting competitive markets and economic efficiency. The instrument was registered on the date of the application, 7 July 2010, and no submissions opposing the concession were received during the consultation period.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCO), applies to goods that are subject to a concession on customs duty, enabling a lower rate of duty to be applied as specified in the order. This Act directly impacts entities that import goods eligible for tariff concessions, including companies such as Reliance Worlwide Pty Ltd, and the broader industry involved in the importation of such goods. The application of a TCO is contingent upon the Chief Executive Officer of Customs determining that the goods do not have substitutable Australian-produced alternatives, as outlined in the Act. The geographical reach of this legislation is national, given its foundation in Commonwealth law. It is important to note that certain goods, as specified in section 269SJ of the Act, are excluded from tariff concessions. The application and specifics of the TCO can be further extended or modified through subordinate instruments, providing flexibility in implementation and adaptation to changing economic conditions. The TCO No. 1030735, for instance, effectively reduced the duty on certain isolating non-return valves to zero, effective from the date of the application, 7 July 2010.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1030735 under the Customs Act 1901 (section 269P) allow the Chief Executive Officer of Customs (CEO) to grant tariff concessions on specific goods, provided certain conditions are met. Specifically, if an application for a Tariff Concession Order (TCO) is made under section 269F, and the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must issue a written order declaring the goods subject to the TCO. This instrument, TCO No 1030735, was made on 29 September 2010 and pertains to certain isolating non-return valves, granting them a free rate of duty instead of the general 5% rate.
The obligations imposed by the Act on parties or entities it governs include the requirement for the CEO to assess whether the application for a TCO meets the core criteria as specified in section 269C. If the CEO determines that no substitutable goods were produced in Australia on the date the application was lodged, they must proceed to issue the TCO. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1) inviting any interested parties to submit objections if they believe the TCO should not be made. This process ensures transparency and allows for public consultation before the concession is granted.
There are no specific offences outlined in this instrument, but any breach of the Customs Act 1901, such as submitting false information in an application, could result in civil or criminal penalties. The penalties for such breaches are outlined in the Customs Act and could include fines and imprisonment, depending on the severity of the offence. For instance, under section 236 of the Customs Act, a person who wilfully makes a false statement or representation in relation to any matter required to be declared under the Act could face a fine of up to $22,200 or imprisonment for up to two years, or both.
The instrument also ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO. This means that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force, as stipulated under paragraph 126(1)(r) of the Regulations. The TCO explicitly states that it does not impose any new liabilities on any person, ensuring that past actions are not retroactively penalised.