EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134871
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.
Bluescope Steel Pty Ltd applied for a TCO in respect of certain double cone valves on 18 October 2011.
Instrument
TCO No 1134871 was made on 12 January 2012. It declares that those certain double cone 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. 1134871 is taken to have come into force on 18 October 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, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument was introduced to address the need for streamlined customs duty concessions for specific goods, thereby promoting trade efficiency and economic growth. The Act facilitates the application process for businesses seeking to lower their customs duties on imported goods under certain conditions. Policy objectives include reducing the financial burden on businesses and enhancing Australia's competitiveness in international markets by making imported goods more affordable. Instrument No. 1134871, specifically addressing double cone valves, was issued on 12 January 2012 following an application by Bluescope Steel Pty Ltd on 18 October 2011. The instrument declares that the valves are subject to a zero rate of duty, effective from the date of the application, provided no substitutable goods were produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 1134871 under the Customs Act 1901 applies specifically to certain double cone valves and the entities involved in their importation. The instrument was enacted to facilitate tariff concessions for these goods, effectively providing a lower rate of customs duty or, in this case, making the duty free. The application of this instrument is geographically and jurisdictionally aligned with the Commonwealth of Australia, as it pertains to the broader scheme established under the Customs Act 1901 for making Tariff Concession Orders. This instrument does not apply to goods specified in section 269SJ of the Act, which lists those goods that are ineligible for tariff concessions. Additionally, the instrument extends its application through subordinate instruments by referring to definitions and criteria set out in various sections of the Customs Act 1901 and the Customs Tariff Act 1995. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as of the date of registration, nor does it impose any liabilities on any person for actions taken prior to the registration date.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, and 269P (sections referenced in parentheses). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. Section 269C outlines the core criteria that must be met for the application to be approved, which includes verifying that no substitutable goods are produced in Australia at the time of application. If the CEO determines that the application meets these criteria, section 269P requires the CEO to issue a written order, the TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations on parties involved in the TCO process. The CEO must ensure that the application complies with the core criteria set out in section 269C. This includes verifying that no substitutable goods are produced in Australia and that the goods are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as required by subsection 269K(1). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the TCO's effective date.
Breaches of the provisions within the Customs Act 1901 can lead to various consequences, including civil and criminal penalties. While the explanatory statement does not detail specific penalties for non-compliance with TCO provisions, general penalties under the Customs Act can include fines and imprisonment. For example, section 236 of the Act specifies that offences involving fraud or false statements can result in fines of up to $22,000 or imprisonment for up to two years, or both. The Act also provides for additional penalties where the offence is committed by a body corporate, potentially resulting in higher fines. It is essential for parties to adhere to the legislative requirements to avoid these consequences.