EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717256
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 float glass production line on 10 October 2007.
Instrument
TCO No 0717256 was made on 30 January 2008. It declares that those certain float glass production 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. 0717256 is taken to have come into force on 10 October 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 Parliament of Australia, provides a framework for the imposition and regulation of customs duty on imported goods. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain goods. This concession scheme was introduced to address the problem of ensuring that Australian industries can access essential imported goods without excessive tariffs, thereby fostering competitive and fair trade practices. The Tariff Concession Instrument No. 0717256 was made under this scheme to provide a tariff concession for specific float glass production lines, allowing them to be imported duty-free. This was achieved after it was determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. The policy objective of this instrument is to support Australian industries by ensuring access to necessary imported goods at a reduced or no cost, thereby promoting economic efficiency and fairness in trade.
Scope and Application
The Customs Act 1901 applies to a wide range of goods, entities and industries by providing the framework for Tariff Concession Orders (TCOs) that can lower the customs duty on specific goods. This Act applies to any person or entity seeking a tariff concession for goods not produced in Australia in the ordinary course of business and not listed in section 269SJ of the Act. The application process involves an assessment by the Chief Executive Officer of Customs, who determines if the goods meet the criteria for a concession. The geographic reach of this Act is national, as it is administered by the Commonwealth of Australia, though it impacts businesses across all states and territories by potentially lowering their import costs. Exclusions from this Act include goods specified in section 269SJ and any goods for which substitutable products are produced in Australia. The Act also allows for the application to be extended or restricted through subordinate instruments, providing flexibility in its implementation.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0717256 under the Customs Act 1901 (section 269F) outline the procedure for applying for a Tariff Concession Order (TCO), which allows for a lower rate of customs duty on specified goods. When an application is made under section 269F, the Chief Executive Officer of Customs (CEO) must determine whether it meets the core criteria set out in section 269C. These criteria include assessing whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and 269E). If these criteria are met, the CEO must make a TCO, as stipulated in section 269P(3). This process was followed in the case of CSR Building Products Limited's application for a TCO concerning certain float glass production lines, which was subsequently granted as TCO No. 0717256 on 30 January 2008.
The Act imposes several obligations on the parties involved. The CEO is obligated to review applications and decide whether they meet the core criteria for a TCO, which includes assessing whether substitutable goods were produced in Australia. CSR Building Products Limited, as the applicant, must ensure that their application provides all necessary information and meets the criteria outlined in the Act. The CEO also has a duty to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application. This transparency requirement aims to ensure that all relevant concerns are considered before a TCO is made.
Non-compliance with the provisions of the Customs Act 1901 can result in civil and criminal penalties. For instance, making false statements or providing misleading information in an application for a TCO could lead to criminal charges under section 240 of the Act, which carries a maximum penalty of two years imprisonment. Additionally, the CEO may impose financial penalties for non-compliance with customs regulations, which can vary based on the severity and intent of the breach. These penalties serve as deterrents against misuse of the TCO scheme and ensure the integrity of the customs duty system.
The Tariff Concession Instrument No. 0717256, which was made effective on 10 October 2007, specifies that the float glass production lines are subject to a free rate of duty, reducing the general rate from 5% to 0%. This concession is designed to benefit importers of these goods by potentially lowering their customs duty payments. Importantly, the TCO does not retroactively affect the rights or liabilities of any person, except for the Commonwealth, and thus does not impose any new liabilities on individuals or entities. The rights of importers are positively impacted, as they may apply for a refund of any duties paid on these goods since the TCO came into effect, thereby ensuring fairness and compliance with the legislative intent.