EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617066
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.
DIAB Australia Pty Ltd applied for a TCO in respect of certain fibreglass scrim on 11 September 2006.
Instrument
TCO No 0617066 was made on 01 December 2006. It declares that those certain fibreglass scrim areis a 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. 0617066 is taken to have come into force on 11 September 2006.
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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties. It includes provisions for Tariff Concession Orders (TCOs) under Part XVA, enabling the Chief Executive Officer of Customs to reduce or exempt customs duty on certain goods. This mechanism was introduced to address the need for tariff relief that could stimulate trade and support industries where domestically produced substitutes do not exist. In this context, TCO No. 0617066, made on 1 December 2006, pertains to certain fibreglass scrim, granting it a free rate of duty by declaring it subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, following the determination that no substitutable goods were produced in Australia. The policy objective is to facilitate trade by reducing the duty burden on specific goods, thereby benefiting importers and supporting related industries.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. These orders apply to goods that are eligible for a lower rate of customs duty, contingent upon an application by a person that satisfies certain core criteria. The Act applies to any individual or entity seeking a tariff concession for goods, provided the goods do not fall under the specified exclusions set out in section 269SJ. The geographic scope of the Act is national, as it pertains to goods entering Australia. The application of a TCO does not extend to goods already imported before the effective date of the concession and does not disadvantage or impose liabilities on any person other than the Commonwealth. The Act also mandates that the CEO must consult by publishing notices in the Gazette to allow interested parties to lodge submissions, though in this case, no submissions were received. TCO No. 0617066, effective from 11 September 2006, pertains to certain fibreglass scrim, reducing the duty rate from 5% to free, following a successful application by DIAB Australia Pty Ltd that met the core criteria established by the Act.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269B, 269D, 269E, and 269P. Section 269F allows for 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. Section 269C outlines the core criteria for a TCO, which must be met for the CEO to consider the application. This involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are found in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written order under section 269P(3).
The obligations imposed by the Customs Act 1901 on parties and entities governed by TCOs are primarily centred around the application process and compliance with the terms of the order. The CEO must ensure that any TCO application is thoroughly assessed against the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting submissions from interested parties regarding the proposed TCO. If no submissions are received, the CEO proceeds to make the order. Importers are entitled to apply for a refund of duty under paragraph 126(1)(r) of the Regulations for goods imported since the TCO is deemed to have come into force.
The Act does not explicitly outline offences or penalties for breaches of TCO provisions. However, non-compliance with the terms of a TCO or failure to adhere to the application process could potentially lead to legal consequences under other provisions of the Customs Act 1901 or related legislation. For example, providing false information in an application could be considered an offence under the general fraud provisions of the Customs Act 1901, which could result in criminal penalties. Importers who fail to apply for a refund of duty when eligible may also face civil consequences, such as financial penalties or interest on unpaid duties. The specific penalties for such breaches would depend on the nature and severity of the non-compliance.