EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514904
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.
Boral Australian Gypsum Ltd applied for a TCO in respect of certain plasterboard plant on 27 October 2005.
Instrument
TCO No 0514904 was made on 23 January 2006. It declares that those certain plasterboard plants 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. 0514904 is taken to have come into force on 27 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. 0514904, enacted in 2006, amends the Customs Act 1901 by addressing a specific gap in the tariff concession scheme for customs duty on imported goods. This instrument was introduced to facilitate the application process for tariff concessions, ensuring that certain goods, which are not produced in Australia in the ordinary course of business, can benefit from a reduced customs duty rate. The instrument was enacted by the Chief Executive Officer of Customs under the authority granted by the Customs Act 1901. The policy objective is to promote fair trade practices by providing tariff relief on imported goods that have no local substitutes, thereby supporting industries that rely on imported materials for their production processes.
This instrument came into effect on the date the application was lodged, 27 October 2005, and ensures that the rights of importers are protected, allowing them to apply for duty refunds on goods imported from that date. It also explicitly states that the implementation of the tariff concession does not impose any new liabilities on individuals or entities, except for the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0514904 applies to goods that are subject to an application for a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. The Act applies to any person or entity that makes an application for a TCO in respect of goods, provided that the goods do not fall within the prohibited categories specified in section 269SJ. The instrument allows the Chief Executive Officer of Customs to reduce the rate of customs duty for specified goods if it is determined that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The geographic scope of the Act is national, as it applies to goods entering Australia, but the instrument itself is a Commonwealth measure. The Act does not specify any exclusions, exemptions, or thresholds beyond those already mentioned, and the application of the Act may be extended or restricted through subordinate instruments such as regulations or further TCOs. The commencement of the TCO is retroactive to the date the application was lodged, as per subsection 269S(1) of the Act, ensuring that the rights of importers are not adversely affected by the timing of the TCO's implementation.
Key Provisions
The main operative sections of this Tariff Concession Instrument are sections 269C, 269P, and 269S of the Customs Act 1901 (the Act). Section 269C outlines the core criteria that a Tariff Concession Order (TCO) application must meet for the Chief Executive Officer of Customs (the CEO) to consider it. Specifically, the application must concern goods for which no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) provides that if the CEO is satisfied that the application meets these core criteria, they must make a written order (a TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S(1) stipulates that a TCO is to be taken as having come into force on the day the application for the TCO was lodged, ensuring that the concession is effective from the date of application.
The obligations and requirements imposed by this Act on the parties it governs include the necessity for the CEO to assess the validity of TCO applications against the core criteria specified in section 269C. If the CEO determines that the application meets these criteria, they are required to issue a TCO as stipulated in section 269P(3). Furthermore, the Act mandates the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made, as outlined in subsection 269K(1). This ensures transparency and allows for any potential objections to be heard before the TCO is finalised. Additionally, the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, thus protecting individuals and entities from disadvantages or liabilities arising from actions taken prior to the TCO's registration.
In terms of offences, penalties, or consequences for breach, the Act does not specify any criminal penalties for failing to comply with the TCO provisions. However, any misuse or non-compliance with the terms of a TCO could lead to civil consequences, such as the denial of tariff concessions or potential financial penalties if the incorrect duty rate is charged. The maximum penalties for such breaches would be governed by the applicable customs regulations, which could include fines and other administrative sanctions. It is important for all parties to adhere strictly to the terms of the TCO to avoid any legal or financial repercussions.