EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701754
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.
CSR Building Products Limited applied for a TCO in respect of certain glass fibre manufacturing line parts on 07 May 2007.
Instrument
TCO No 0701754 was made on 23 July 2007. It declares that those certain glass fibre manufacturing line parts 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. 0701754 is taken to have come into force on 07 May 2007.
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. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). These orders allow for lower rates of customs duty on specified goods, facilitating trade and economic activity by reducing costs for importers. The Tariff Concession Instrument No. 0701754, issued in 2007, addresses the gap in tariff concessions for specific glass fibre manufacturing line parts by reducing the duty from the general rate of 5% to free. This initiative was intended to support the competitiveness of Australian industries by ensuring that necessary manufacturing inputs could be sourced more cost-effectively. The CEO, acting under the authority granted by section 269F of the Act, determined that the application met the core criteria and thus issued the concession, effective from the date of application.
Scope and Application
The Tariff Concession Instrument No. 0701754 under the Customs Act 1901 provides relief in the form of tariff concessions for specific goods that are otherwise subject to a standard rate of customs duty. This legislation applies to entities or individuals seeking tariff concessions for goods that are not produced in Australia and for which no suitable substitute goods are manufactured domestically. The instrument specifically relates to glass fibre manufacturing line parts, as applied for by CSR Building Products Limited, and grants these goods a zero rate of duty, in contrast to the general rate of 5% specified in the Customs Tariff Act 1995. The application of this concession is governed by the stipulations within the Customs Act 1901, particularly sections 269F, 269C, and 269P, which set out the process for applying for and granting tariff concession orders by the Chief Executive Officer of Customs. This instrument's reach is national, applying across Australia, and its effects are prospective, not impacting any pre-existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO for certain goods. Once the CEO confirms that the application pertains to goods not excluded under section 269SJ, they must assess if the application meets the core criteria specified in section 269C. This involves determining whether, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B clarifies that "goods produced in Australia" means goods as defined by section 269D, "ordinary course of business" as per section 269E, and "substitutable goods" as defined in section 269D in relation to the goods subject to the TCO application.
The obligations imposed by the Act on the CEO include ensuring that a TCO application is assessed against the core criteria and publishing a notice in the Gazette, as per subsection 269K(1), inviting any interested parties to submit objections. If no objections are received, the CEO must proceed with making the TCO. In this instance, CSR Building Products Limited applied for a TCO for certain glass fibre manufacturing line parts, which was granted on 23 July 2007 as TCO No 0701754. This order was made because the CEO determined that no substitutable goods were produced in Australia, leading to the application of a duty rate of free on the specified goods, down from the general rate of 5%.
The Act also outlines consequences for breaches. While the explanatory statement does not detail specific penalties, the Customs Act generally provides for various civil and criminal penalties for non-compliance with its provisions. These can include fines, imprisonment, or both, depending on the severity and nature of the breach. The Tariff Concession Instrument No. 0701754 itself does not specify penalties but operates under the overarching legal framework provided by the Customs Act 1901 and the Customs Tariff Act 1995. The TCO ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date, without imposing any liabilities on any person.