EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1104148
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.
GSA Industries (Aust) Pty Ltd applied for a TCO in respect of certain tempering and or mixing valve parts on 28 January 2011.
Instrument
TCO No 1104148 was made on 18 April 2011. It declares that those certain tempering and or 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. 1104148 is taken to have come into force on 28 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, enacted by the Australian Parliament, provides a framework for the administration of customs and excise in Australia. The Act establishes the procedures for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which can lower the customs duty on specific goods. This was introduced to address the gap in providing economic benefits to Australian businesses by reducing the cost of importing certain goods that are not produced domestically. TCO No. 1104148, made on 18 April 2011, concerns certain tempering and mixing valve parts and declares that these goods are exempt from the general rate of duty of 5%, effectively making the duty rate free. The instrument was made after GSA Industries (Aust) Pty Ltd applied for a TCO on 28 January 2011 and no submissions were received opposing the concession. The policy objective is to support Australian industries by ensuring that certain imported goods are subject to lower customs duty rates, thereby aiding in the competitive pricing of these goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 1104148, established under Part XVA of the Customs Act 1901, applies to a specific set of goods, namely certain tempering and or mixing valve parts. The instrument was made in response to an application by GSA Industries (Aust) Pty Ltd, and it specifies a lower rate of customs duty for these goods. The Act permits the Chief Executive Officer of Customs to make such Tariff Concession Orders (TCOs) if the application meets the core criteria, which include the absence of substitutable goods produced in Australia. The application for this TCO was lodged on 28 January 2011 and was subsequently approved, with the instrument coming into force on the same date. This instrument applies nationally within Australia, subject to the conditions outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The TCO does not affect any existing rights or liabilities of persons other than the Commonwealth, ensuring that it does not disadvantage any individual or entity with respect to actions taken before the instrument’s registration. Importers, however, stand to benefit from the application, as they can apply for a refund of duties paid on these goods from the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1104148 under the Customs Act 1901 include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C specifies the core criteria that must be met for a TCO application to be considered valid, such as the absence of substitutable goods produced in Australia on the day the application was lodged. Upon meeting these criteria, section 269P(3) mandates that the CEO must issue a written order (TCO), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby providing a lower rate of customs duty. The CEO must also publish a notice in the Gazette inviting any submissions against the TCO, as per subsection 269K(1) of the Act.
The obligations imposed by the Act on the parties involved are primarily on the applicant, who must ensure their application meets the core criteria as specified in section 269C. The CEO, on receiving a valid application, must follow the prescribed process of issuing a written TCO order if the criteria are met, and also ensure that a notice is published in the Gazette for public submissions, in accordance with subsection 269K(1). Additionally, the CEO must ensure that any TCO does not disadvantage any person other than the Commonwealth or impose liabilities on them in relation to actions taken before the TCO's registration date, as stipulated in subsection 269S(1).
In terms of offences, penalties, or consequences for breach, the Act does not explicitly detail specific penalties for non-compliance with the issuance of a TCO. However, general compliance with the Customs Act 1901 and its regulations could potentially involve civil or criminal penalties depending on the nature and severity of the breach. For instance, under section 285 of the Customs Act, penalties can include fines and imprisonment for breaches such as providing false information or evading duty. The specific penalties for such breaches would be determined by the courts based on the relevant laws and the circumstances of each case.