EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114139
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.
Boyne Smelters applied for a TCO in respect of certain baghouse filter jet air pulse valves on 04 May 2011.
Instrument
TCO No 1114139 was made on 25 July 2011. It declares that those certain baghouse filter jet air pulse 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. 1114139 is taken to have come into force on 04 May 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 Parliament of Australia, facilitates the reduction of customs duty rates for specified goods through the creation of Tariff Concession Orders (TCOs). This legislative framework was designed to address the need for economic incentives and support for certain industries by reducing the financial burden of customs duties on imported goods that have no Australian-made equivalents. The Act enables the Chief Executive Officer of Customs to make a TCO if certain criteria are met, including the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 1114139, introduced under this legislative scheme, applies a zero-rate duty to certain baghouse filter jet air pulse valves, effective from the date the application was lodged, which was 04 May 2011. This instrument aims to provide relief to importers by removing the general 5% duty on these specific goods, thereby supporting the industry by making these components more cost-effective to import.
Scope and Application
The Tariff Concession Instrument No. 1114139 under the Customs Act 1901 applies to the specific category of goods known as certain baghouse filter jet air pulse valves. The instrument was made in response to an application by Boyne Smelters and is designed to grant a tariff concession, effectively reducing the customs duty on these goods to free, whereas the general rate of duty is 5%. This concession applies to goods imported from the date the application was lodged, 04 May 2011. The instrument is applicable to any person or entity importing these specific valves, thereby directly impacting importers by reducing their customs duty obligations. However, the application of this TCO is limited to the goods specified in the instrument and does not extend to any other goods or uses. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities on importers or other entities, although it does allow for the potential refund of duties paid on these goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Order No. 1114139 (referred to as TCO No. 1114139) under the Customs Act 1901 (the Act) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows for the application of Tariff Concession Orders (TCO) by any person, while section 269C outlines the core criteria that an application must meet, such as the absence of substitutable goods produced in Australia. Section 269P mandates the Chief Executive Officer of Customs (the CEO) to issue a written order if the application satisfies the core criteria, and section 269SJ specifies goods that cannot be subject to a TCO. TCO No. 1114139, issued on 25 July 2011, declared certain baghouse filter jet air pulse valves as goods subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a tariff rate of duty reduced from 5% to free.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, the CEO must ensure that any application for a TCO is considered against the core criteria set out in section 269C. This involves verifying that no substitutable goods are produced in Australia at the time of application. Secondly, under section 269K, the CEO must publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made. This ensures transparency and allows for any objections to be raised before the order is finalised. Additionally, the Act mandates that a TCO comes into force on the day the application is lodged, as stipulated in section 269S.
In terms of potential breaches and consequences, the Act does not explicitly state specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, any misuse or improper application of a TCO could potentially lead to legal challenges or administrative penalties. For instance, if an entity were to improperly claim a tariff concession not warranted by the Act, it could face scrutiny and corrective actions by the CEO or other relevant authorities. While the Act does not specify maximum penalties for such breaches, the legal consequences could include fines, duty repayments with interest, or other administrative sanctions as deemed appropriate by the relevant authorities.
Overall, TCO No. 1114139 serves to reduce the duty on certain baghouse filter jet air pulse valves, benefiting importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO. The Act ensures that the process for granting such concessions is transparent and subject to certain criteria, while also providing mechanisms for interested parties to voice their concerns.