EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601599
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.
L.R.Nanduri applied for a TCO in respect of certain glass fibre tape on 29 December 2005.
Instrument
TCO No 0601599 was made on 10 March 2006. It declares that those certain glass fibre tape 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. 0601599 is taken to have come into force on 29 December 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 tariff concession orders (TCOs) that allow for reduced customs duty on specific goods. This was introduced to address the need for more flexible tariff regulations that could support industry and economic growth by reducing the cost of importing certain goods. In line with this, Tariff Concession Instrument No. 0601599 was created to offer a concession on glass fibre tape, effective from the date the application was lodged on 29 December 2005. The policy objective of this instrument is to facilitate the import of goods that are not produced in Australia, thereby supporting industries that rely on imported materials without imposing new liabilities on any party. The process involves the Chief Executive Officer of Customs assessing applications against core criteria, and in this case, the CEO determined that no substitutable goods were produced in Australia, allowing for a zero percent duty rate on the specified glass fibre tape.
Scope and Application
The Tariff Concession Instrument No. 0601599 applies to individuals and entities that seek tariff concessions on goods under the Customs Act 1901, specifically in relation to the importation of certain glass fibre tape. This Act pertains to the Commonwealth jurisdiction, allowing the Chief Executive Officer of Customs to grant tariff concessions if certain conditions are met, such as the absence of substitutable goods produced in Australia. The concession applies to the specific goods mentioned in the instrument, and it does not affect any rights or liabilities of persons other than the Commonwealth in respect of actions taken before the instrument's registration. The geographic scope is national, as it relates to customs duties across Australia. There are no stated exclusions or exemptions in this particular instrument, and it does not impose any liabilities on any person. The application of the Act can be extended or restricted through subordinate instruments, which provide further details on the process and criteria for tariff concessions.
Key Provisions
The main operative sections of this Tariff Concession Instrument (TCO) are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows for the application of a Tariff Concession Order (TCO) by an individual, which the Chief Executive Officer of Customs (CEO) may then assess against the core criteria specified in section 269C. If the application meets these criteria, the CEO must issue a TCO under section 269P. This particular TCO No. 0601599 pertains to certain glass fibre tape and declares that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a zero percent duty rate instead of the general 5% rate.
The obligations imposed by this Act primarily concern the CEO of Customs, who must review TCO applications and determine whether they meet the core criteria outlined in section 269C. If the application is deemed valid, the CEO must issue a written TCO. Additionally, the CEO is required under section 269K to publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made. For applicants, the Act requires that they provide sufficient information to satisfy the CEO that the goods in question are eligible for tariff concessions.
Section 269SJ of the Customs Act 1901 specifies that certain goods are ineligible for TCOs. Therefore, any applicant must ensure that the goods they are applying for are not among those listed in section 269SJ. Furthermore, the CEO must ensure that the goods do not have substitutable alternatives produced in Australia. The CEO's decision must be based on whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
In terms of offences and penalties, the Customs Act 1901 does not specify particular offences or penalties related to the issuance or misuse of TCOs. However, any breaches of the Customs Act 1901, such as providing false information in an application or attempting to evade duties through fraudulent means, could lead to criminal charges. Penalties for such offences could include fines or imprisonment, as determined by the courts. For civil penalties, the incorrect classification of goods or misuse of TCOs may result in financial penalties or the requirement to pay back duties with interest. The severity of these penalties will depend on the nature and extent of the breach.