EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1107613
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.
Western Process Controls applied for a TCO in respect of certain pressure relief valves on 01 March 2011.
Instrument
TCO No 1107613 was made on 16 May 2011. It declares that those certain pressure relief 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. 1107613 is taken to have come into force on 01 March 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 for the imposition of customs duties on imported goods. In addressing the need for flexibility in the imposition of these duties, the Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, thereby offering reduced duty rates on specified goods. This mechanism was introduced to facilitate trade by reducing the cost burden on businesses importing specific goods not produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 1107613, made on 16 May 2011, illustrates the application of this scheme by detailing the process through which Western Process Controls successfully applied for a TCO for certain pressure relief valves. The policy objective here is to encourage the importation of goods that are not domestically produced, thereby supporting trade and potentially fostering competition and innovation in the Australian market.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking to import goods into Australia, with its provisions being administered by the Chief Executive Officer of Customs. The Act facilitates the creation of Tariff Concession Orders (TCOs) which, when granted, apply to specific goods and reduce the customs duty rate to zero for those goods, provided they are not substitutes for goods produced within Australia. This legislation is applicable nationally, and its scope is further defined through the Customs Tariff Act 1995. Exclusions under section 269SJ of the Customs Act 1901 outline goods that cannot be subject to a TCO, such as those that might be deemed harmful or detrimental to domestic industries. The TCO No. 1107613, for instance, was applied to certain pressure relief valves, and was effective from the date of application, 01 March 2011, without any submissions opposing the concession. The application process requires the CEO to publish a notice in the Gazette inviting objections, although in this case, none were received. The TCO ensures that no existing rights are adversely affected by its enactment, and it does not impose new liabilities on individuals or entities, except for the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1107613, under the Customs Act 1901, involve the granting of a Tariff Concession Order (TCO) for specific pressure relief valves. Section 269C establishes that a TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a specific item of Schedule 4 to the Customs Tariff Act 1995. For the pressure relief valves in question, this TCO was made on 16 May 2011, and it specifies that these goods are subject to item 50 of Schedule 4 to the Tariff, with the duty rate being free instead of the general 5% duty rate.
The Act imposes several obligations on the parties involved. The CEO must ensure that a TCO application meets the core criteria as outlined in section 269C, which includes verifying that no substitutable goods were produced in Australia. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. The CEO must also ensure that the TCO does not adversely affect the rights of any person as at the date of registration, as stipulated in subsection 269S(1). This means that any existing rights or duties, particularly those of importers, are protected, and they may even benefit from the TCO by applying for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in various penalties. Although the explanatory statement does not specify the exact penalties for breach of the TCO or its associated provisions, breaches of similar legislation typically result in both civil and criminal consequences. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity and intent of the breach. The maximum penalties for specific offences would be detailed in the relevant sections of the Customs Act 1901 and any subsidiary legislation.
In summary, Tariff Concession Instrument No. 1107613 provides for the exemption of certain pressure relief valves from the general customs duty rate, contingent on meeting specific criteria and complying with the procedural obligations set out in the Customs Act 1901. The Act ensures that the rights of importers and other stakeholders are protected and provides mechanisms for potential penalties in cases of non-compliance.