EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905353
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.
Rinnai Australia applied for a TCO in respect of certain low iron tempered glass panels on 17 February 2009.
Instrument
TCO No 0905353 was made on 15 May 2009. It declares that those certain low iron tempered glass panels 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. 0905353 is taken to have come into force on 17 February 2009.
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 enacted to provide for the administration of the Australian Customs and Border Protection Service and to establish a scheme under which Tariff Concession Orders (TCOs) can be made. The 2009 Instrument No. 0905353 is an example of how the Act facilitates tariff concessions to support Australian industry by reducing the customs duty on specific imported goods. This particular Instrument was introduced to address the need for Rinnai Australia to import certain low iron tempered glass panels without incurring customs duty, thereby supporting their manufacturing operations and potentially lowering the cost of their products. The Instrument was enacted by the Chief Executive Officer of Customs, following an application by Rinnai Australia on 17 February 2009, and became effective on the same date. The policy objective is to ensure that the application of TCOs does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation applies to individuals or entities that seek to reduce the customs duty on specific goods by applying for a TCO. The Act targets industries and businesses that import goods and benefit from reduced tariff rates, provided that no substitutable goods are produced in Australia and the application meets the core criteria set forth in section 269C of the Act. The geographic and jurisdictional reach of the Customs Act is national, encompassing the entire Commonwealth of Australia. Exclusions are noted in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act may be further extended or restricted through subordinate instruments such as regulations or further orders under the Customs Act. TCO No. 0905353, made on 15 May 2009, provides tariff concessions on certain low iron tempered glass panels, reducing their duty from the general rate of 5% to free, effective from the date of application on 17 February 2009.
Key Provisions
The Customs Act 1901, through Part XVA, outlines a process for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) which can reduce customs duties on certain goods. According to section 269F, an application for a TCO can be submitted to the CEO for goods not listed in section 269SJ, which specifies goods that are ineligible for a TCO. If the CEO determines that the application satisfies the core criteria under section 269C, they must issue a TCO if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) further mandates that the CEO must issue a written TCO if satisfied that the application meets the core criteria, specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
The obligations under this legislation require applicants to ensure that the goods they wish to have concessional tariff rates for are not produced in Australia and are not among the ineligible goods listed in section 269SJ. Once an application is submitted, the CEO must publish a notice in the Gazette inviting any interested parties to provide submissions opposing the TCO, as per section 269K(1). The CEO is also required to consider these submissions before making a decision. If no submissions are received, the CEO must proceed with issuing the TCO if the application meets the criteria.
In terms of consequences, section 269S(1) stipulates that a TCO is effective from the date the application was lodged. There are no liabilities imposed on any person, including the Commonwealth, by the TCO, and it does not affect any rights as at the date of registration. Importers may apply for a refund of duty paid on the goods since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations. The maximum penalty for non-compliance or misrepresentation in the application process is not explicitly stated in the text but would typically involve civil or criminal penalties as prescribed by relevant sections of the Customs Act 1901 or other applicable laws.