EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1053513
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 actuated valve assemblies on 07 December 2010.
Instrument
TCO No 1053513 was made on 28 February 2011. It declares that those certain actuated valve assemblies 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. 1053513 is taken to have come into force on 07 December 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 Australian Parliament, serves as a fundamental piece of legislation governing the importation and exportation of goods within Australia. This Act establishes a framework for the administration of customs duties and other charges, as well as the regulation of imports and exports. One of its provisions, part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders are designed to provide lower rates of customs duty on certain goods, subject to specific criteria being met. The objective of the TCO scheme is to promote economic efficiency and competitiveness by reducing the cost of imported goods, provided that these goods are not being produced domestically and there are no suitable substitutes available in Australia. The introduction of TCO No. 1053513 on 28 February 2011, which grants a tariff concession on certain actuated valve assemblies, exemplifies this policy objective by reducing the duty rate from 5% to free, thereby benefiting importers of these goods.
Scope and Application
The Tariff Concession Instrument No. 1053513 applies to the specific goods, in this case, certain actuated valve assemblies, and is a component of the Customs Act 1901. This Act is applicable across the Commonwealth of Australia and governs the administration of customs and excise duties, including the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The instrument applies to entities or individuals who import these specific goods and is intended to provide a lower rate of customs duty for these goods, as stipulated by the TCO. Notably, this concession does not extend to goods specified in section 269SJ of the Act, which are ineligible for TCOs. The geographic reach of this Act is national, as it pertains to customs regulations applicable throughout Australia. Any exclusions or limitations are strictly defined within the Act and its related sections, ensuring that only eligible goods benefit from the tariff concession. The Act’s application may be extended or refined through subordinate instruments, such as regulations, which provide further detail on the implementation and scope of tariff concessions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, sets out the scheme for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on certain goods. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must decide if the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines the terms 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' relevant to the TCO application.
Once the CEO is satisfied that the application meets the core criteria, they are required under subsection 269P(3) of the Act to issue a written order, known as a TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This instrument applies a reduced or free rate of customs duty on these goods. In this case, for certain actuated valve assemblies, the general rate of duty is 5%, but the rate for goods subject to the TCO is free.
The obligations under the Customs Act 1901 for parties involve ensuring that any applications for TCOs comply with the specified criteria. The CEO must also publish a notice in the Gazette, as required by subsection 269K(1), inviting submissions from any person who believes there are reasons why the TCO should not be made. In the instance of TCO No. 1053513, no submissions were received in response to the published notice. Additionally, the Act ensures that the TCO does not adversely affect the rights of any person other than the Commonwealth regarding actions taken before the TCO's effective date. Importers benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
Regarding breaches and penalties, the Customs Act 1901 does not explicitly outline specific penalties for non-compliance with TCOs. However, general provisions under the Customs Act may apply, including fines and imprisonment for breaches of customs laws. The severity of penalties would depend on the nature and extent of the breach, and the courts have the discretion to impose appropriate sanctions. In practice, non-compliance could lead to financial penalties, confiscation of goods, or other legal consequences as deemed fit by the courts.