EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0838999
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.
Glass Insulations Pty Ltd applied for a TCO in respect of certain automatic double glazed unit on 07 November 2008.
Instrument
TCO No 0838999 was made on 30 January 2009. It declares that those certain automatic double glazed unit 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. 0838999 is taken to have come into force on 07 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 Tariff Concession Instrument No. 0838999, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods, in this case, certain automatic double glazed units. This instrument was introduced to facilitate reduced customs duty rates on these goods, providing economic benefits to importers by eliminating duty costs. The instrument was enacted by the Chief Executive Officer of Customs, following an application from Glass Insulations Pty Ltd on 7 November 2008, and it came into force on the same date. The policy objective is to ensure that no substitutable goods were produced in Australia, thereby qualifying the goods for tariff concessions and providing a duty-free status as stipulated by the instrument.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for Tariff Concession Orders (TCOs) which can lower the rate of customs duty for certain goods. This Act applies to any person or entity that seeks a reduction in customs duty for specific goods by applying for a TCO from the Chief Executive Officer (CEO) of Customs. The Act's jurisdiction covers the entire Commonwealth of Australia, and its application is not limited by state or territory boundaries. The application process requires that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. Once an application meets the core criteria outlined in section 269C of the Act, the CEO must issue a written TCO. The TCO has a retroactive effect, taken to be in force from the date the application was lodged, as per section 269S(1) of the Act. It is important to note that the TCO does not affect the rights of any person as they stood at the time of registration, nor does it impose any new liabilities on individuals or entities. Importers of the specified goods, however, can benefit by applying for a refund of any duty paid since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0838999, issued under section 269F of the Customs Act 1901, pertains to a Tariff Concession Order (TCO) concerning certain automatic double glazed units. The CEO of Customs has determined that these units are subject to a lower rate of customs duty, specifically item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%. This decision was made after assessing that no substitutable goods were produced in Australia, as required by section 269C of the Act. The TCO came into effect on 7 November 2008, the date the application was lodged, as stated in subsection 269S(1) of the Act.
In accordance with the Act, the CEO has obligations to follow specific criteria when considering a TCO application. According to section 269C, the CEO must ensure that on the application date, no substitutable goods were produced in Australia in the ordinary course of business, a term defined by section 269E. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made. In this instance, no submissions were received. The CEO must also consider the definitions provided in sections 269D and 269E to determine what constitutes "goods produced in Australia" and "ordinary course of business" respectively.
Failure to comply with the requirements of the Customs Act 1901 can result in various consequences. While specific offences and penalties are not detailed in this explanatory statement, breaches of the Act can generally lead to both civil and criminal penalties. Civil penalties may include fines and other monetary sanctions, while criminal penalties might involve imprisonment, depending on the severity of the breach. The maximum penalties are not specified in the explanatory statement, but they would be determined in accordance with the relevant sections of the Customs Act 1901 and any other applicable legislation. The TCO itself does not impose liabilities on any person and does not affect the rights of any person as at the date of registration, except to beneficially affect the rights of importers who can apply for a refund of duty.