EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1100407
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 5 January 2011.
Instrument
TCO No 1100407 was made on 28 March 2011. 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. 1100407 is taken to have come into force on 5 January 2011.
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 enacted to provide for the regulation of the import and export of goods, including the imposition of customs duty. The Act established a framework for Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on specified goods. Enacted by the Australian Parliament, this legislation aims to provide economic benefits by facilitating trade and ensuring that Australian businesses have access to competitively priced goods. The Tariff Concession Instrument No. 1100407, made under the Customs Act, was introduced to address the issue of ensuring that certain thermostatic mixing valve parts are accessible at a reduced customs duty rate, thereby supporting industry needs and potentially lowering consumer costs. The policy objective of this instrument is to provide relief on specific goods, ensuring that they are available at a more affordable rate, which in turn can stimulate economic activity and support market competitiveness.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs. These orders grant lower customs duty rates on specified goods when certain criteria are met, as outlined in section 269F. The application for a TCO must not pertain to goods specified in section 269SJ, which excludes certain types of goods from the scheme. For an application to be considered, it must meet the core criteria set out in section 269C, which include the absence of substitutable goods produced in Australia, as defined in section 269D. The CEO is required to make a written order if satisfied that the application meets these criteria, as detailed in section 269P(3). The geographic reach of this legislation is national, applying throughout Australia. The TCO in question, No. 1100407, applies to certain thermostatic mixing valve parts, setting their duty rate to free, whereas the general rate is 5%. The order was made on 28 March 2011 and is taken to have commenced on 5 January 2011, with no submissions received in opposition to its issuance. This TCO does not retroactively affect the rights of any person, ensuring that no existing rights or liabilities are disadvantaged.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), include sections 269C, 269P, and 269SJ (section 269C). Section 269C specifies that an application for a TCO meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P outlines that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written order, declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. Section 269SJ details the goods that cannot be subject to a TCO. For instance, TCO No. 1100407 applies to certain thermostatic mixing valve parts, declaring that these goods are subject to item 50 of Schedule 4 of the Tariff with a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations and requirements on parties or entities it governs. For example, under section 269F, a person can apply to the CEO for a TCO in respect of goods. The CEO must then assess whether the application meets the core criteria as outlined in section 269C. This includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. This process ensures transparency and provides an opportunity for interested parties to voice their concerns.
The Customs Act 1901 also sets out specific offences, penalties, or civil/criminal consequences for breaches of its provisions. However, the explanatory statement for TCO No. 1100407 does not detail specific penalties or consequences for non-compliance with TCOs. Generally, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The exact penalties are specified in other sections of the Customs Act and related regulations, but these are not outlined in the explanatory statement provided.
In summary, TCO No. 1100407, under the Customs Act 1901, allows for a lower rate of customs duty on certain thermostatic mixing valve parts by declaring these goods to be subject to item 50 of Schedule 4 of the Tariff, with a duty rate of free. This concession is subject to the CEO's determination that no substitutable goods were produced in Australia. The process includes publishing a notice in the Gazette and inviting submissions from interested parties, ensuring transparency and fairness in the application process. While the explanatory statement does not detail specific penalties for non-compliance, breaches of the Customs Act can generally lead to civil or criminal consequences.