EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1039910
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 Worldwide applied for a TCO in respect of certain thermostatic mixing valve parts on 30 August 2010.
Instrument
TCO No 1039910 was made on 22 November 2010. It declares that those certain thermostatic mixing valve parts 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. 1039910 is taken to have come into force on 30 August 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, enacted by the Commonwealth Parliament, establishes a framework for the regulation of customs and border control in Australia. It provides the legal basis for the creation of Tariff Concession Orders (TCOs), which offer reduced customs duty rates for specified goods. The Act was amended to introduce the TCO mechanism to address the need for more flexible and responsive customs duty regulations that can better accommodate the evolving needs of the Australian economy and industry. Instrument No. 1039910, made under the authority of the Customs Act, specifically targets certain thermostatic mixing valve parts by granting them a tariff concession, thereby reducing the customs duty on these items from the general rate of 5% to free. This legislative action was taken to ensure that Australian businesses and consumers benefit from lower prices and increased competitiveness without imposing any liabilities or disadvantaging existing rights.
Scope and Application
The Tariff Concession Instrument No. 1039910, made under the Customs Act 1901, applies to certain thermostatic mixing valve parts by providing a lower rate of customs duty for these goods. This concession is applicable to the specific goods listed in the instrument, which were the subject of an application by Reliance Worldwide on 30 August 2010. The instrument was formally issued on 22 November 2010, and it came into effect on the date of the application, 30 August 2010, in line with the provisions of the Customs Act. The instrument applies to the Commonwealth jurisdiction, and it operates to provide tariff concessions for specified goods. The Act does not apply to goods listed in section 269SJ, which cannot be subject to a Tariff Concession Order. The Chief Executive Officer of Customs is responsible for determining whether an application meets the core criteria for a tariff concession, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The rights of importers are positively affected by this order, enabling them to apply for a refund of duty on goods imported from the effective date of the concession.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1039910, under the Customs Act 1901, establish the framework for the application, assessment, and implementation of Tariff Concession Orders (TCOs). Section 269F of the Act outlines the process by which an individual or entity can apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. The CEO must then determine if the application is valid, which involves confirming that the goods are not those specified in section 269SJ of the Act that cannot be subject to a TCO. If the CEO is satisfied that the application is valid, they must evaluate whether it meets the core criteria set out in section 269C of the Act, which requires that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business.
The Act imposes specific obligations on the parties involved in the TCO process. The CEO must ensure that an application for a TCO is not in relation to goods specified in section 269SJ and that it meets the core criteria outlined in section 269C. If these criteria are met, the CEO must make a written TCO order, as required by section 269P(3) of the Act. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe there are reasons why the TCO should not be granted. The CEO's actions are critical in ensuring that the application process is transparent and inclusive.
The Act also delineates the consequences for non-compliance with its provisions. While the explanatory statement does not specify criminal or civil penalties for breach of the TCO provisions, it is understood that failure to comply with the terms and conditions of the TCO could result in legal repercussions. The CEO has the authority to enforce the terms of the TCO, and any breaches may lead to penalties, although the specific nature of these penalties is not detailed in the explanatory statement. The rights and liabilities of individuals and entities are protected under the Act to ensure that the TCO does not disadvantage anyone or impose liabilities for actions taken prior to the TCO's effective date.