EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618386
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.
G James Pty Ltd applied for a TCO in respect of certain glass sheet handling cutting and breakout lines on 08 November 2006.
Instrument
TCO No 0618386 was made on 02 February 2007. It declares that those certain glass sheet handling cutting and breakout lines 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. 0618386 is taken to have come into force on 08 November 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 Tariff Concession Instrument No. 0618386, made under the Customs Act 1901, was enacted to address the need for tariff concessions for specific goods, in this case, certain glass sheet handling, cutting, and breakout lines. This instrument was introduced to provide a lower rate of customs duty for these goods, effectively making them duty-free. The instrument was developed to ensure that Australian businesses can access competitively priced goods without the burden of high import tariffs, thereby fostering a more competitive market. The Customs Act 1901 provides the legal framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who must consider applications against specified criteria to ensure that the concessions are justified. The objective of this legislation is to facilitate the importation of goods that are not produced domestically, thereby benefiting importers and potentially the broader economy by lowering costs and increasing product availability.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the application of Tariff Concession Orders (TCOs) that are designed to reduce the rate of customs duty on certain goods. Specifically, Part XVA of the Act empowers the Chief Executive Officer of Customs to make these orders, which apply to goods that are not substitutable by any goods produced in Australia in the ordinary course of business. The process involves an application to the CEO, who must then determine whether the application meets the core criteria stipulated in the Act. If satisfied, the CEO issues a TCO, which is effective from the date of application lodgement. The application of TCOs is restricted to goods not specified in section 269SJ of the Act and requires the CEO to publish a notice in the Gazette inviting objections, although no submissions were received for the specific TCO No. 0618386. This order, which came into effect on 8 November 2006, applies to certain glass sheet handling cutting and breakout lines, granting them a zero rate of duty as opposed to the general 5% rate, thereby benefiting importers by allowing them to claim refunds for duties paid on imports since the effective date.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines the process for creating Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P(3)). A TCO is a directive issued by the Chief Executive Officer of Customs (the CEO) which lowers the customs duty on specific goods. Section 269F of the Act allows any person to apply to the CEO for a TCO concerning goods. For the application to be considered, it must not pertain to goods outlined in section 269SJ, which specifies goods that are ineligible for a TCO. The CEO must then determine whether the application meets the core criteria set out in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
The obligations imposed by the Act on parties involve the submission and review of TCO applications. For instance, applicants must ensure their requests meet the core criteria, and the CEO is obligated to review these applications and make a decision based on the information provided. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit their views on the proposed TCO, as outlined in subsection 269K(1). In the case of TCO No. 0618386, the CEO determined that the application for certain glass sheet handling cutting and breakout lines met the core criteria, resulting in a TCO that effectively reduces the duty on these goods from a general rate of 5% to free.
Sections of the Act also detail the consequences of non-compliance. While the explanatory statement does not explicitly enumerate offences or penalties for breach, the Customs Act 1901 generally provides for various sanctions under different circumstances. Typically, breaches of customs regulations can lead to criminal charges, civil penalties, or both, depending on the severity and intent behind the breach. Maximum penalties can vary significantly but often include substantial fines and, in some cases, imprisonment for individuals found guilty of serious customs violations.
In summary, the main sections of the Customs Act 1901 governing TCOs require applicants to submit applications that meet specific criteria, mandate the CEO to review these applications, and publish notices to allow for public submissions. Once a TCO is issued, it generally benefits importers by reducing duty rates on specified goods. The Act imposes obligations on both applicants and the CEO, while potential breaches can lead to severe penalties under Australian law.