EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721998
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.
Artique Designs Pty Ltd applied for a TCO in respect of certain mirrored glass plaques on 27 December 2007.
Instrument
TCO No 0721998 was made on 14 March 2008. It declares that those certain mirrored glass plaques 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. 0721998 is taken to have come into force on 27 December 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, facilitates the creation of Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specified goods. This Act allows the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0721998, issued on 14 March 2008, is an example of this mechanism, granting a tariff concession on certain mirrored glass plaques, reducing their duty from 5% to free. This process ensures that the rights of importers are protected, and they may apply for duty refunds on imports made since the TCO was deemed to come into effect on 27 December 2007. The absence of submissions opposing the TCO indicates broad acceptance of the tariff reduction.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that reduce the rate of customs duty on certain goods. The Act applies to individuals and entities seeking a TCO for goods that are not specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. A TCO is granted if the CEO is satisfied that no substitutable goods are produced in Australia at the time of the application, adhering to definitions provided in sections 269D, 269E, and 269F of the Act. Once a TCO is issued, it provides tariff relief on specific goods from the date the application was lodged, as per subsection 269S(1). This legislative mechanism aims to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into effect, without imposing any new liabilities on third parties. The Act's application is national in scope, governed by the Commonwealth, and its application may be further detailed through subordinate instruments such as regulations.
Key Provisions
The Tariff Concession Instrument No. 0721998 (the Instrument) under the Customs Act 1901 (the Act) establishes a concession on customs duty for certain mirrored glass plaques. According to section 269F, a person can apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the application complies with the criteria set out in section 269C and does not involve goods listed in section 269SJ, the CEO must issue a TCO. This Instrument, made on 14 March 2008, specifies that the certain mirrored glass plaques are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO, upon receiving an application, must determine if the application meets the core criteria under section 269C. If the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E, they must issue a written TCO (section 269P(3)). Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received.
Failure to comply with the requirements of the Act may result in certain consequences. While the explanatory statement does not explicitly outline offences, penalties, or criminal consequences, it is implicit that non-compliance with the duty concession rules could lead to legal ramifications. The Act provides that a TCO does not affect the rights of a person as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). However, non-compliance with the terms of the TCO could potentially result in civil or administrative penalties, depending on the specific circumstances and applicable laws.