EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132921
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 conical valves on 27 September 2011.
Instrument
TCO No 1132921 was made on 19 December 2011. It declares that those certain conical 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. 1132921 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 Customs Act 1901, enacted by the Parliament of Australia, facilitates the application of tariff concession orders (TCOs) to reduce customs duty on specific goods. These orders aim to lower the financial burden on importers by providing duty-free access to certain goods, provided they are not substitutable by locally produced alternatives. The legislation empowers the Chief Executive Officer of Customs to assess and approve TCO applications based on whether substitutable goods are produced in Australia. In the case of Tariff Concession Order No. 1132921, the CEO determined that conical valves, subject to a general duty rate of 5%, qualified for a zero-duty rate as no substitutable goods were manufactured domestically. The order, which came into force on the date of the application, 27 September 2011, was published in the Gazette with no objections received, thereby affirming its implementation. This legislative measure seeks to support the importation of goods that are not locally produced, thereby fostering competitive markets and potentially lowering costs for consumers.
Scope and Application
The Tariff Concession Instrument No. 1132921 under the Customs Act 1901 applies to certain conical valves and provides for a concession on the rate of customs duty for these goods. The Act permits the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on goods that meet specific criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The scope of this particular TCO is limited to the conical valves specified in the application made by Hammelmann, and it became effective from the date the application was lodged, 27 September 2011. This TCO benefits importers by providing a duty-free rate for the specified goods, while ensuring that no existing rights or liabilities of any person, other than the Commonwealth, are adversely affected by the concession. The instrument does not extend or restrict its application beyond the specified goods and conditions, and no submissions were received during the consultation period inviting objections to the TCO.
Key Provisions
The Customs Act 1901 sets forth a mechanism by which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCO) under section 269F (1). An individual or entity can apply to the CEO for a TCO in respect of specific goods, and if the CEO is satisfied that the application is valid and the goods do not fall under the restricted categories outlined in section 269SJ, the CEO must assess whether the application meets the core criteria stipulated in section 269C. This core criterion requires that, on the date of the application, there are no substitutable goods being produced in Australia in the ordinary course of business. Substitutable goods, as defined in section 269D, are those that can be put to a use that corresponds with the goods in question. If the CEO is convinced that the application meets these criteria, they are required by subsection 269P(3) to issue a written order, which is the TCO, declaring the goods subject to a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily centered around the application and approval process for TCOs. The applicant must ensure their application is valid and that the goods in question meet the eligibility criteria. The CEO, on the other hand, has the responsibility to assess the application's validity and determine if it meets the core criteria. Furthermore, once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted. If no submissions are received, the CEO proceeds to issue the TCO. The Act also requires that the TCO does not affect the rights of any person, except the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the TCO's registration.
The Customs Act 1901 imposes specific consequences for breaches of its provisions. Any failure to comply with the requirements for TCOs, or any other provisions of the Act, may result in penalties. However, the explanatory statement does not detail specific offences, penalties, or consequences for breaches of the Act. Typically, breaches of customs legislation can result in civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties may include fines, while criminal penalties could lead to imprisonment. The maximum penalties are not specified in the explanatory statement but would be detailed in the relevant sections of the Customs Act 1901 or related regulations.