EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514612
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.
FRP Engineering applied for a TCO in respect of certain Fibreglass Reinforced Gratings on 17 October 2005.
Instrument
TCO No 0514612 was made on 3 January 2006. It declares that those certain Fibreglass Reinforced Gratings 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. 0514612 is taken to have come into force on 17 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 Tariff Concession Instrument No. 0514612, enacted in 2006, was established to address the need for tariff concessions on certain goods under the Customs Act 1901. This legislation was introduced to facilitate the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, ensuring that a lower rate of customs duty applies to specified goods. The policy objective is to provide relief on customs duties for goods that are not substitutable by Australian-produced alternatives, thus potentially encouraging trade and industry growth by reducing costs for importers. The instrument was created in response to an application by FRP Engineering for a TCO on certain Fibreglass Reinforced Gratings, resulting in a duty reduction from 5% to 0% for these goods. This measure ensures that the rights of importers are positively impacted without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0514612, made under the Customs Act 1901, applies to the specific goods known as Fibreglass Reinforced Gratings, as requested by FRP Engineering. The instrument operates on a national level within Australia, applying across all states and territories. The scope of the Act includes individuals or entities that are involved in the importation of these specific goods, and it aims to provide a concession on the customs duty applicable to them. The Act stipulates that a Tariff Concession Order (TCO) can be applied for by any person, provided the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from the concession scheme. The instrument does not extend or restrict its application through subordinate instruments but operates within the confines of the core criteria outlined in the Act, specifically section 269C and section 269P. The TCO is effective from the date the application was lodged, which is 17 October 2005, and it does not impose any liabilities on persons other than the Commonwealth nor does it affect any rights they held prior to the registration of the order.
Key Provisions
The Tariff Concession Instrument No. 0514612, under the Customs Act 1901, allows for the reduction of customs duty on certain Fibreglass Reinforced Gratings (sections 269F, 269C, 269P(3)). This instrument specifies that these gratings are subject to a zero percent duty rate, down from the general rate of five percent (section 269P(3)). To qualify, the goods must not have any substitutable products being produced in Australia, meaning that no equivalent product is manufactured domestically (section 269C). The instrument was made effective from the date the application was lodged, 17 October 2005 (subsection 269S(1)).
The Customs Act 1901 imposes several obligations on parties involved in the tariff concession process. The Chief Executive Officer of Customs must ensure that the application for a tariff concession order (TCO) does not pertain to goods that are specifically excluded under section 269SJ. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting any objections or submissions from interested parties (subsection 269K(1)). Additionally, the CEO must decide whether the application meets the core criteria set out in section 269C, which includes verifying that no substitutable goods are produced in Australia at the time of the application (section 269C).
Failing to comply with the requirements set out in the Customs Act 1901 can result in various consequences. While the explanatory statement does not detail specific offences or penalties, general provisions of the Act may impose fines and other penalties for non-compliance with customs regulations. The maximum penalties can vary depending on the nature and severity of the breach, but they are designed to enforce adherence to the legislative framework governing customs duties and tariff concessions. The Act ensures that any rights of the public, particularly importers, are protected and not adversely affected by the issuance of a TCO.