EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508906
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.
Shellhold Ltd applied for a TCO in respect of certain Fibreglass Insect Screening on 8 July 2005.
Instrument
TCO No 0508906 was made on 16 September 2005. It declares that those certain Fibreglass Insect Screening 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 0%.
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. 0508906 is taken to have come into force on 8 July 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 Tariff Concession Instrument No. 0508906 was enacted under the Customs Act 1901 to facilitate the granting of tariff concessions on certain goods, thereby reducing their customs duty rates. This legislative instrument was introduced to address a gap in the tariff structure by allowing the Chief Executive Officer of Customs to apply reduced duty rates on goods that are not substitutable by locally produced alternatives, thus supporting economic efficiency and competitiveness. The policy objective of this instrument is to ensure that such tariff reductions do not disadvantage existing rights or impose new liabilities on individuals or entities, while also providing a benefit to importers who can now apply for duty refunds on goods imported since the instrument's effective date. The instrument was created following an application by Shellhold Ltd for tariff concessions on Fibreglass Insect Screening, and it came into effect on 8 July 2005, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0508906 pertains to the application of tariff concessions under the Customs Act 1901, specifically focusing on the eligibility of certain Fibreglass Insect Screening for a reduced rate of customs duty. This instrument applies to entities such as Shellhold Ltd, which submitted an application for a Tariff Concession Order (TCO) to the Chief Executive Officer of Customs (CEO) on 8 July 2005. The Act allows for TCOs to be issued under section 269F for goods where no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C, 269D, and 269E of the Act. The CEO must satisfy the core criteria, which includes verifying that the goods in question are not specified in section 269SJ, and then proceed to make a written order if satisfied. In this instance, the CEO determined that the application for Fibreglass Insect Screening met the core criteria, resulting in the issuance of TCO No. 0508906 on 16 September 2005, which applied a 0% duty rate on these goods, down from the general rate of 5%. This TCO came into effect on the date of application, 8 July 2005, and does not affect the rights of any person, including imposing liabilities for actions taken before the TCO's registration.
Key Provisions
The Tariff Concession Instrument No. 0508906, issued under the Customs Act 1901, pertains to the granting of a Tariff Concession Order (TCO) for certain Fibreglass Insect Screening. According to section 269F (1), a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, which in this case are Fibreglass Insect Screening. If the CEO determines that the application meets the core criteria outlined in section 269C, a TCO is made, as was done in this instance with TCO No. 0508906. This order specifies that the general rate of duty on these goods is reduced from 5% to 0%.
The Act imposes several obligations on the parties involved. The CEO must assess the application to ensure it complies with the core criteria, particularly that no substitutable goods were produced in Australia at the time the application was lodged, as per section 269C. Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons against making the TCO to submit their views. In this case, no such submissions were received.
The Act also delineates the consequences of non-compliance or breaches. While the Explanatory Statement does not specify penalties for breaches of the TCO provisions, general provisions of the Customs Act 1901 do outline penalties for non-compliance with customs regulations. These penalties can include fines and, in severe cases, imprisonment. The specific maximum penalties can vary depending on the nature and severity of the breach but are generally designed to ensure adherence to customs regulations.
The TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken before the date of registration. Importers, however, will benefit from this concession as they will be able to apply for a refund of duty on goods imported since the TCO was taken to have come into force on 8 July 2005. This aspect is particularly relevant under paragraph 126(1)(r) of the Regulations, which facilitates the refund process for importers of the specified goods.