EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132920
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.
Hammelmann applied for a TCO in respect of certain valves on 27 September 2011.
Instrument
TCO No 1132920 was made on 19 December 2011. It declares that those certain 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. 1132920 is taken to have come into force on 27 September 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 Tariff Concession Instrument No. 1132920, enacted in 2011, pertains to the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs) that can provide a lower rate of customs duty for specific goods. This legislative instrument was introduced to address the need for more flexible tariff arrangements that could support Australian industries by making certain imported goods more competitive. The instrument was enacted by the Chief Executive Officer of Customs, as per the provisions of the Customs Act, which allows for the consideration of applications for TCOs and the subsequent decision-making process based on core criteria such as the absence of substitutable goods produced in Australia. The overall policy objective of this instrument is to facilitate trade and support Australian industries by providing tariff relief on specific goods, thus ensuring that businesses are not unfairly disadvantaged by the availability of cheaper imported alternatives.
Scope and Application
The Tariff Concession Instrument No. 1132920 under the Customs Act 1901 applies specifically to certain valves for which Hammelmann has applied for a Tariff Concession Order (TCO). This Act facilitates the reduction of customs duty on particular goods by allowing the Chief Executive Officer of Customs (CEO) to make a TCO if certain criteria are met, particularly if no substitutable goods are produced in Australia. The TCO is applicable to the valves specified in the application, and the geographic reach of this Act is national, as it pertains to customs duties across Australia. The Act does not specify any exclusions or exemptions other than those outlined in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which provides the framework for the tariffs and duty rates. The TCO does not disadvantage any person or impose liabilities on anyone for actions taken before its registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1132920, which falls under the Customs Act 1901, are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria (section 269C), such as no substitutable goods being produced in Australia at the time of the application, the CEO must make a TCO, declaring that the goods in question are subject to a specific rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P). The TCO comes into effect on the day the application is lodged (section 269S).
The Act imposes specific obligations and requirements on the parties involved. The CEO of Customs is obligated to evaluate applications for TCOs, ensuring that they meet the core criteria stipulated in the Act. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K(1) of the Act. Importers of goods that become subject to a TCO can apply for a refund of duty on goods imported since the TCO came into effect, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 or the associated regulations can lead to various civil and criminal consequences. The Act does not specify particular offences or penalties within the context of this TCO. However, general breaches of the Customs Act may lead to civil penalties such as fines, and in severe cases, criminal penalties which could include imprisonment, reflecting the severity of the breach. The exact penalties would depend on the specific nature and gravity of the breach.
In summary, the Tariff Concession Instrument No. 1132920 under the Customs Act 1901 allows for the application of reduced customs duty rates on certain goods if specific criteria are met. The CEO of Customs has the responsibility of assessing applications and publishing notices inviting submissions. Importers of affected goods may apply for duty refunds. While the specific penalties for breaches are not detailed within this context, general breaches of the Act could result in civil and criminal penalties.