EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1106304
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.
Davey Water Products applied for a TCO in respect of certain 6-way multi-port valves on 16 February 2011.
Instrument
TCO No 1106304 was made on 09 May 2011. It declares that those certain 6-way multi-port 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. 1106304 is taken to have come into force on 16 February 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 Commonwealth Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act was designed to address the need for a mechanism that could allow for the reduction of customs duty rates on specific goods, thereby facilitating trade and economic growth. The explanatory statement for Tariff Concession Instrument No. 1106304, issued on 9 May 2011, details the application process for TCOs and specifies that if the CEO determines an application meets the core criteria, a TCO will be issued. The instrument in question concerns Davey Water Products' application for a TCO on certain 6-way multi-port valves, resulting in a tariff rate reduction from 5% to free. This concession applies retroactively from the date the application was lodged, 16 February 2011, and is intended to benefit importers by potentially allowing them to apply for duty refunds on goods imported since that date.
Scope and Application
The Tariff Concession Instrument No. 1106304 under the Customs Act 1901 applies to goods specifically identified in the Instrument, namely certain 6-way multi-port valves. The Act empowers the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods that meet certain criteria, primarily that no substitutable goods are produced in Australia. The scope of the Act extends to any individual or entity applying for a TCO and any importer of goods that subsequently benefit from the tariff concession. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and its customs duties. The Act does not specify any exclusions, exemptions, or thresholds other than those outlined in section 269SJ, which precludes certain goods from being subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations, but this particular Instrument does not indicate any such extensions or restrictions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1106304, made under the Customs Act 1901, pertain to the application and approval of Tariff Concession Orders (TCOs). Section 269F allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. Section 269C mandates that the CEO must assess whether the application meets the core criteria, which is satisfied if no substitutable goods are produced in Australia on the date the application was lodged (section 269P(3)). If the CEO is satisfied, they must make a written order (TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting a concession on the duty rate.
The obligations imposed by the Act on parties or entities include ensuring that any application for a TCO is made in good faith and complies with the criteria outlined in sections 269F, 269C, and 269P(3). The CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any interested parties (subsection 269K(1)). This process ensures transparency and provides an opportunity for stakeholders to voice any objections to the granting of the concession. Additionally, the CEO must consider the definitions provided in sections 269D, 269E, and 269G to determine whether the application meets the core criteria.
Breaches of the provisions of the Customs Act 1901 can result in both civil and criminal consequences. While the Explanatory Statement does not specify particular offences or penalties related to the TCO, it is important to note that any misrepresentation or fraudulent application could potentially attract penalties under the Act. In general, the Act provides for fines and imprisonment for breaches, with the exact penalties varying depending on the nature and severity of the offence. The Act also allows for the recovery of duties and other charges, which could result in financial liabilities for non-compliant parties.