EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505243
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.
International Building Products Pty Ltd applied for a TCO in respect of certain u-profile channel glass on 12 May 2005.
Instrument
TCO No 0505243 was made on 07 October 2005. It declares that the certain u-profile channel glass is a product 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. 0505243 is taken to have come into force on 12 May 2005.
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 a framework for the imposition and administration of customs duties, including mechanisms for tariff concession orders (TCOs) which allow for reduced duty rates on certain goods. This Act was introduced to address the need for flexibility in the imposition of customs duties to support economic efficiency and trade. The Tariff Concession Instrument No. 0505243, made under the Customs Act, grants a tariff concession for certain u-profile channel glass, reducing the duty from the general rate of 5% to free. This was achieved following an application by International Building Products Pty Ltd and subsequent approval by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia. The policy objective here is to facilitate trade by reducing the cost of importing certain goods, thereby potentially stimulating demand and economic activity within relevant sectors.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. This legislative framework is designed to encourage the importation of goods that are not domestically produced or are not produced in sufficient quantities to meet demand, thereby benefiting consumers and potentially industries reliant on these goods. The application process involves a person applying to the CEO for a TCO, which is subject to meeting specific criteria, such as the absence of substitutable goods produced in Australia at the time of application. The TCO mechanism operates nationwide across Australia, governed by the Commonwealth, and applies to any entity or individual importing goods that meet the eligibility criteria under the Act. Notably, the Act excludes certain goods from TCO consideration, as specified in section 269SJ, ensuring that the concessions are appropriately targeted. The scope of the Act may be further refined or expanded through subordinate instruments, although the primary legislation provides a comprehensive structure for the administration and application of tariff concessions.
Key Provisions
The main operative sections of this Tariff Concession Instrument No. 0505243 under the Customs Act 1901, particularly sections 269C, 269P, and 269S, lay out the criteria and process for applying for and granting a Tariff Concession Order (TCO). Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, while section 269P(3) requires the Chief Executive Officer of Customs (CEO) to issue a written TCO if satisfied that the application meets these criteria. Section 269S stipulates that the TCO comes into force on the day the application was lodged, which in this case was 12 May 2005.
The Act imposes several obligations on the parties involved. Firstly, applicants, such as International Building Products Pty Ltd, must ensure that their applications meet the core criteria outlined in section 269C. This means they must demonstrate that no substitutable goods were produced in Australia on the application date. The CEO, on the other hand, is required to evaluate the application, make a decision based on the criteria, and issue a written TCO if the criteria are met (section 269P). Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made, as stipulated in subsection 269K(1).
The legislation also sets out consequences for non-compliance or breach of its provisions. While the explanatory statement does not detail specific offences or penalties for breaching the Act, it is understood that failure to comply with the conditions set forth for obtaining a TCO or misusing the concessions granted could lead to legal actions. Typically, breaches of the Customs Act 1901 could result in both civil and criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The precise penalties would be determined by the courts based on the specific circumstances of any breach.
In summary, the Tariff Concession Instrument No. 0505243 provides a framework for reducing customs duties on certain u-profile channel glass, contingent on meeting specific criteria and following the procedural requirements outlined in the Customs Act 1901. This process ensures that such concessions are granted fairly and legally, with obligations clearly defined for applicants and the CEO. While the explanatory statement does not detail specific penalties, breaches of the Act could lead to significant legal consequences.