EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802087
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 Pty Ltd applied for a TCO in respect of certain recycling gypsum plant on 6 February 2008.
Instrument
TCO No 0802087 was made on 11 April 2008. It declares that those certain recycling gypsum plant 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. 0802087 is taken to have come into force on 6 February 2008.
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, established a framework for the administration of customs duties, including provisions for Tariff Concession Orders (TCOs) that reduce customs duties on certain goods. The Tariff Concession Instrument No. 0802087, enacted in 2008, is part of this framework, addressing the gap in the availability of tariff concessions for specific imported goods. This instrument allows the Chief Executive Officer of Customs to issue orders that grant tariff concessions, thereby reducing the duty payable on specified goods. The policy objective behind this legislation is to facilitate the import of goods that are not produced in Australia, thereby supporting trade and economic activities by lowering the cost of imported goods. The instrument was introduced following an application by CSR Building Products Pty Ltd for tariff concessions on certain recycling gypsum plant, reflecting the intent to encourage the importation of goods that are essential for specific industries but not domestically produced.
Scope and Application
The Tariff Concession Instrument No. 0802087, made under Part XVA of the Customs Act 1901, applies to the application submitted by CSR Building Products Pty Ltd for tariff concessions on certain recycling gypsum plant. This legislation specifically targets goods that are not produced domestically in the ordinary course of business, thereby qualifying for a lower customs duty rate. The geographic and jurisdictional reach of this Act is national, as it is administered under the federal Customs Act 1901. The Act excludes goods specified in section 269SJ, which cannot be subject to a Tariff Concession Order (TCO). The application process involves the Chief Executive Officer of Customs who must ensure that the application meets the core criteria, including the absence of substitutable goods produced in Australia. This particular TCO came into force on 6 February 2008, the date the application was lodged, and benefits the rights of importers by allowing them to apply for a refund of duty on imported goods from that date. Importantly, the TCO does not disadvantage or impose any liabilities on any person other than the Commonwealth for actions taken before the registration date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0802087 under the Customs Act 1901 (sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S) establish the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). If an application for a TCO is made and it meets the core criteria, a TCO can be issued, thereby applying a lower rate of customs duty to the specified goods (section 269P). For the CSR Building Products Pty Ltd application, the CEO was satisfied that no substitutable goods were produced in Australia, leading to a TCO being issued that effectively grants free duty for the specified recycling gypsum plant (section 269C). The TCO, numbered 0802087, was made on 11 April 2008, and it specifies that the goods in question are subject to item 50 of Schedule 4 to the Tariff, with the general duty rate being 5% and the concessional rate being free (section 269P(3)).
The Customs Act 1901 imposes several obligations on the parties involved in the process of issuing a TCO. Firstly, the CEO must determine whether an application for a TCO meets the core criteria, which include ensuring that no substitutable goods are produced in Australia (section 269C). This determination hinges on the definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" provided in sections 269D, 269E, and 269B respectively. Secondly, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). Any submissions received must be considered before a decision is made. In the case of TCO No. 0802087, no submissions were received in response to the notice.
Under the Customs Act 1901, there are specific offences and penalties for breaches related to TCOs. Although the explanatory statement does not detail specific offences or penalties, it is implied that any misuse or non-compliance with the terms of a TCO could lead to legal consequences. Typically, breaches of customs regulations can result in fines and/or imprisonment, depending on the severity of the breach. The specific penalties would be determined by the courts, but they could include significant financial penalties and potential imprisonment for those found guilty of serious violations. The Act also ensures that the rights of importers will be beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any liabilities on any person for actions taken before the TCO was registered.