EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514126
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.
Stegbar Pty Ltd applied for a TCO in respect of certain Glass Cutters on 14 October 2005.
Instrument
TCO No 0514126 was made on 9 January 2006. It declares that those certain Glass Cutters 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. 0514126 is taken to have come into force on 14 October 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 was enacted by the Parliament of Australia to provide a comprehensive framework for customs and excise regulation. This Act was introduced to facilitate the administration of customs duties and to regulate the import and export of goods. One of its significant provisions is the scheme under which Tariff Concession Orders (TCOs) may be made, allowing for a lower rate of customs duty on certain goods. This scheme was designed to address the problem of ensuring that Australian industries remain competitive by providing tariff relief on goods that are not produced domestically, thus promoting economic growth and trade efficiency. The Tariff Concession Instrument No. 0514126, issued on 9 January 2006, is an example of this scheme in action, where a zero percent duty rate was applied to certain Glass Cutters following a successful application by Stegbar Pty Ltd, demonstrating the Act's policy objective of supporting Australian businesses through tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0514126 under the Customs Act 1901 applies to any entity or individual seeking a reduction in customs duty on specified goods by applying for a Tariff Concession Order (TCO). The instrument specifically addresses the application by Stegbar Pty Ltd for a TCO concerning certain Glass Cutters, which, upon approval, enjoy a reduced customs duty rate from 5% to 0%. This Act operates within the Commonwealth jurisdiction, impacting entities engaged in the importation of goods subject to the TCO. The application process and criteria for a TCO are stringent, requiring the Chief Executive Officer of Customs to ensure that the goods in question are not substitutable by any products manufactured domestically and that the application aligns with the core criteria outlined in the Customs Act. The instrument does not disadvantage any person other than the Commonwealth and imposes no liabilities on entities or individuals for actions taken prior to the TCO's effective date. Subordinate instruments can extend or further define the application of TCOs, thereby providing flexibility and specificity to the administration of the Customs Act 1901.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0514126 under the Customs Act 1901 (section 269P) outline the process and criteria for making Tariff Concession Orders (TCO). Specifically, section 269F allows an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria, they must make a written order under section 269P(3) declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, the TCO No. 0514126 declares that certain Glass Cutters are subject to a 0% duty rate, down from the general rate of 5%.
Under the Customs Act 1901, the obligations imposed on the parties primarily revolve around the application process for TCOs. The CEO must ensure that any TCO application does not pertain to goods listed in section 269SJ, and must verify that the application meets the core criteria under section 269C. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received.
In terms of consequences for non-compliance or breach, the Customs Act 1901 does not specify particular offences, penalties, or civil/criminal consequences directly related to the TCO process. However, any misuse or fraudulent application for a TCO could potentially lead to broader legal repercussions under other sections of the Customs Act 1901 or related legislation. The act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any liabilities on persons in respect of actions taken before the TCO is registered. This means that the TCO does not retroactively affect any transactions or liabilities incurred before its effective date, which is the date the application for the TCO was lodged.