EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0838132
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.
Lisec Australia applied for a TCO in respect of certain insulated glass sheet production line on 03 November 2008.
Instrument
TCO No 0838132 was made on 30 January 2009. It declares that those certain insulated glass sheet production line 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. 0838132 is taken to have come into force on 03 November 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 Parliament of Australia, facilitates the application of reduced customs duty rates to specific goods through the mechanism of Tariff Concession Orders (TCOs). The 2009 Tariff Concession Instrument No. 0838132, introduced to address the specific needs of industries seeking tariff reductions, was developed under section 269F of the Act. This legislative instrument aims to alleviate the financial burden on businesses by providing tariff concessions for goods where no substitutable goods are produced in Australia. In the case of Lisec Australia’s application for a TCO on certain insulated glass sheet production lines, the Chief Executive Officer of Customs determined that the application met the core criteria, thereby granting a tariff concession that reduced the duty from 5% to free. The instrument ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, as outlined in Part XVA, provides a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities seeking lower rates of customs duty on specific goods by applying for a TCO. The Act imposes a requirement on the CEO to determine whether an application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. If these criteria are met, the CEO must issue a TCO, which declares that the goods in question are subject to a prescribed item of the Customs Tariff Act 1995, resulting in a concessional duty rate. The Act also mandates consultation with the public, requiring the CEO to publish notices in the Gazette to invite submissions opposing the TCO, although no submissions were received for TCO No. 0838132. This TCO applies retroactively to the date the application was lodged, and it does not affect existing rights or impose new liabilities on any person except the Commonwealth. This legislative framework allows for the flexible application of tariff concessions while maintaining a structured process for review and public consultation.
Key Provisions
The Customs Act 1901 allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) under section 269F (1), which lower the customs duty on certain goods. These TCOs apply when the CEO determines that an application meets the core criteria specified in section 269C, primarily ensuring that no substitutable goods are produced in Australia at the time the application is made. If the CEO is satisfied that the application meets these criteria, a written TCO is issued under section 269P(3), as seen in TCO No. 0838132 for certain insulated glass sheet production lines. The TCO declares these goods to be subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced duty rate from the general 5% to free.
The obligations imposed by the Act on the parties involve ensuring that applications for TCOs comply with the core criteria. The CEO must verify that the goods in question are not substitutable by any Australian-produced goods and that the application is not for goods listed in section 269SJ, which cannot be subject to a TCO. For the application process, the CEO must publish a notice in the Gazette under section 269K(1) inviting submissions from any interested parties. This was done for TCO No. 0838132, although no submissions were received. The TCO itself comes into force on the day the application is lodged, as per section 269S(1), and does not affect any existing rights or impose new liabilities on any person.
In terms of penalties and consequences for breach, the Act does not explicitly outline specific offences or penalties related to the making or misuse of a TCO. However, any misuse or improper application of the concession could potentially lead to legal consequences under general customs legislation. For example, if a person were to falsely claim eligibility for a TCO, they might face penalties under sections of the Customs Act that deal with fraud and misrepresentation. The specific penalties would depend on the nature and severity of the offence, with potential fines and imprisonment for serious breaches. The Act ensures that TCOs do not disadvantage any person other than the Commonwealth and do not impose new liabilities, protecting the interests of importers who can benefit from duty refunds on goods imported since the TCO came into effect.