EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917380
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.
Decor Corporation applied for a TCO in respect of certain borosilicate glassware on 22 May 2009.
Instrument
TCO No 0917380 was made on 14 August 2009. It declares that those certain borosilicate glassware 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. 0917380 is taken to have come into force on 22 May 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, enacted by the Australian Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act was designed to address the need for flexible tariff arrangements that could respond to specific economic or industrial needs by providing lower customs duty rates on certain goods. The instrument in question, Tariff Concession Instrument No. 0917380, was introduced to provide tariff relief for certain borosilicate glassware, following an application by Decor Corporation. This particular TCO was made to ensure that no substitutable goods were being produced in Australia, thereby meeting the core criteria stipulated in the Act. The policy objective of this TCO is to provide tariff concessions that support Australian industries by reducing the cost of importing certain goods, ultimately benefiting importers by allowing them to apply for refunds on duties paid prior to the TCO’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0917380, as enacted under Part XVA of the Customs Act 1901, applies to individuals or entities seeking to import specific goods, namely certain borosilicate glassware, into Australia. The instrument is applicable to those entities that satisfy the core criteria stipulated in the Act, specifically ensuring that no substitutable goods are produced in Australia at the time of the application. The geographic reach of this legislation is national, as it pertains to imports throughout Australia. The application of this Instrument is further delineated by the Customs Tariff Act 1995, under which certain items of Schedule 4 to the Tariff are specified. Notably, the Act does not apply to goods that are listed in section 269SJ, which are ineligible for tariff concessions. The Instrument does not extend or restrict its application through subordinate instruments, but it does provide a mechanism for public consultation, where any interested party can lodge a submission opposing the concession before it is finalised. The commencement date of the Tariff Concession Order aligns with the date the application was lodged, thereby ensuring that the rights of importers are protected and any liabilities are avoided.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, pertain to Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in relation to certain goods, provided the goods are not those specified in section 269SJ, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring that the goods in question are subject to a lower rate of customs duty, as specified in a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular TCO, number 0917380, applies to certain borosilicate glassware, setting the duty rate at free instead of the general 5% rate.
Under the Customs Act 1901, the CEO has specific obligations when processing a TCO application. Firstly, the CEO must determine whether the application is valid and whether the goods are ineligible under section 269SJ. If the application is deemed valid, the CEO must then verify that the core criteria in section 269C are met, which involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as stipulated in subsection 269K(1). In the case of TCO No. 0917380, no submissions were received in response to this invitation.
Failure to comply with the provisions of the Customs Act 1901 concerning TCOs may result in various consequences. If an entity fails to adhere to the criteria for a TCO or submits an ineligible application, the CEO has the authority to reject the application. Furthermore, any misuse or fraudulent claims related to TCOs could lead to civil or criminal penalties. The specific penalties are not detailed in the explanatory statement, but they would generally include fines and potential imprisonment for more severe breaches. The Act does not impose any liabilities on persons other than the Commonwealth for actions taken before the registration of a TCO.
In summary, the Customs Act 1901 establishes a framework for Tariff Concession Orders, allowing for reduced customs duty on specified goods. The CEO of Customs is responsible for evaluating applications and ensuring compliance with the outlined criteria. Failure to comply with the Act's provisions could result in rejection of the TCO application or civil/criminal penalties for non-compliance or fraud. The explanatory statement does not specify the exact penalties, but they would typically include fines and potential imprisonment for serious violations.