EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836601
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.
Marbletex Glass Pty Ltd applied for a TCO in respect of certain glass sheet compartment racks on 22 October 2008.
Instrument
TCO No 0836601 was made on 16 January 2009. It declares that those certain glass sheet compartment racks 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. 0836601 is taken to have come into force on 22 October 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 was amended to introduce a scheme whereby Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs, providing for lower rates of customs duty on specified goods. This was aimed at addressing the problem of ensuring that Australian industries could compete effectively by having access to essential imported goods at reduced duty rates, provided that no substitutable goods were produced domestically. Enacted by the Australian Government, the policy objective was to foster economic efficiency and support industries by reducing the cost of imported goods through tariff concessions. Tariff Concession Instrument No. 0836601, made on 16 January 2009, is an example of this scheme in action, where a TCO was issued for certain glass sheet compartment racks, reducing their duty rate from 5% to free.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to goods that are the subject of an application and meet the core criteria, particularly where no substitutable goods are produced in Australia in the ordinary course of business. A TCO application can be lodged by any person under section 269F, provided the goods are not specified in section 269SJ, which excludes certain goods from TCO eligibility. If the CEO is satisfied that the application meets the criteria, they must issue a TCO, which then applies a lower rate of customs duty to the specified goods, as outlined in the Customs Tariff Act 1995. The TCO No. 0836601, for instance, was made on 16 January 2009, for certain glass sheet compartment racks, reducing the duty rate from 5% to free, effective from 22 October 2008. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, though no submissions were received in response to this particular TCO application. The TCO does not affect any existing rights or liabilities of persons other than the Commonwealth and can provide benefits to importers by allowing duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, in particular section 269F, permit an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria outlined in section 269C, they must make a written TCO. For instance, section 269P(3) states that if the CEO is satisfied that a TCO application meets the core criteria, they must issue a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. This process ensures that only goods for which no substitutable goods are produced in Australia, as defined by sections 269D and 269E, are eligible for tariff concessions.
The Act imposes several obligations on the parties involved. The CEO of Customs must assess each TCO application to determine if it meets the core criteria. If no submissions are received in response to the notice published in the Gazette under section 269K(1), the CEO proceeds with the assessment. The CEO must also ensure that the TCO does not adversely affect the rights of any person as at the date of registration, as stipulated in subsection 269S(1). Additionally, the CEO is responsible for publishing the TCO in the Gazette and ensuring that the TCO does not impose any liabilities on any person, other than the Commonwealth.
Under the Customs Act 1901, breaches of the provisions related to TCOs can result in various consequences. While the explanatory statement does not explicitly detail offences or penalties, it is implied that non-compliance with the Act's requirements could lead to legal action. The general rate of duty on the goods subject to the TCO is 5%, but the rate becomes free once the TCO is in effect. Any failure to adhere to the Act’s stipulations could potentially lead to civil or criminal penalties, although the exact penalties are not specified in the document. However, the Act’s overarching framework suggests that serious breaches might be subject to penalties as prescribed under other relevant sections of the Customs Act or associated regulations.