EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709264
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.
New Life Industries applied for a TCO in respect of certain tempered glass panels on 12 June 2007.
Instrument
TCO No 0709264 was made on 17 August 2007. It declares that those certain tempered glass panels 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. 0709264 is taken to have come into force on 12 June 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 Australian Parliament, governs the administration of customs duties and associated regulations. In 2007, the Tariff Concession Instrument No. 0709264 was introduced to address the need for tariff concessions that facilitate the import of specific goods under particular conditions. This instrument allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply reduced customs duties on goods that are not produced domestically or are not readily substitutable by locally produced goods. The policy objective behind this legislative measure is to support industries by reducing import costs, thereby encouraging the use of imported goods in certain sectors where local production does not meet demand or quality standards. This approach aims to balance the interests of domestic producers and consumers by ensuring the availability of competitively priced goods while protecting certain domestic industries from undue competition.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty to goods that are the subject of such orders. This legislative provision allows for applications from persons or entities seeking reduced customs duties on particular goods, provided these goods are not specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. The Act mandates that a TCO application must meet core criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269C, 269D, and 269E of the Act. Upon meeting these criteria, the CEO issues a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. The process requires public consultation, wherein the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in some cases, such as TCO No 0709264, no submissions may be received. The TCO's commencement date is the day the application is lodged, and it does not affect existing rights or impose liabilities on persons other than the Commonwealth for actions taken prior to the TCO's registration.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for Tariff Concession Orders (TCOs), which can reduce the customs duty on certain goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO. If the CEO determines that the application is valid and meets the core criteria, as outlined in section 269C, a TCO can be issued. Section 269P(3) mandates that the CEO make a written order declaring the goods eligible for a lower duty rate if the application meets the core criteria. For instance, Tariff Concession Order No. 0709264 was issued on 17 August 2007 for certain tempered glass panels, setting a 0% duty rate instead of the general 5%.
The Act imposes certain obligations on both the applicant and the CEO. Section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person to lodge a submission if they believe the TCO should not be made. The CEO must also ensure that the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia at the time of the application, as defined in sections 269D and 269E. For example, in the case of TCO No. 0709264, the CEO satisfied these conditions, leading to the issuance of the order.
Failure to comply with the provisions of the Act can result in civil or criminal consequences. Although the explanatory statement does not specify penalties for non-compliance, the Act generally provides for penalties under sections related to customs and excise duties. Breaches may attract fines and, in severe cases, imprisonment. The exact penalties depend on the nature and severity of the breach, as detailed in the relevant sections of the Customs Act and associated regulations. The TCO itself does not impose any liabilities on any person, ensuring that rights and liabilities prior to the order's registration remain unaffected.