EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923732
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.
Viridian Pty Ltd applied for a TCO in respect of certain rolled glass on 07 July 2009.
Instrument
TCO No 0923732 was made on 18 September 2009. It declares that those certain rolled glass 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. 0923732 is taken to have come into force on 07 July 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 by the Australian Parliament and is the principal legislation governing the importation and exportation of goods in Australia. It was designed to facilitate trade by providing a regulatory framework for customs duties and other taxes. The Act was further amended by Tariff Concession Instrument No. 0923732, introduced to address the specific issue of providing tariff concessions on certain goods. This instrument allows for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO), provided they meet certain criteria, such as not having substitutable goods produced in Australia. The policy objective behind this measure is to encourage the import of goods that are not domestically produced, thereby promoting competition and consumer choice in the Australian market. The Tariff Concession Instrument No. 0923732, which came into effect on 7 July 2009, was created following an application by Viridian Pty Ltd for a TCO on certain rolled glass, resulting in a duty-free status for these goods.
Scope and Application
The Tariff Concession Instrument No. 0923732 under the Customs Act 1901 applies to any individual or entity that seeks a tariff concession order for specific goods, ensuring that the application adheres to the stipulations outlined in the Act. The application process is overseen by the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, particularly whether no substitutable goods are produced in Australia in the ordinary course of business. The instrument extends across the Commonwealth of Australia, impacting all entities involved in the import of the specified goods. Exclusions from this tariff concession are limited to those goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The scope of the TCO is further defined by the Customs Tariff Act 1995, where the specific tariff items are delineated in Schedule 4. The instrument’s application can be extended or refined through subordinate instruments, ensuring adaptability to changing economic conditions or legislative amendments.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs), as outlined in section 269F. These orders allow for a lower rate of customs duty to apply to certain goods. A person can apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not those specified in section 269SJ which cannot be subject to such concessions. If the CEO determines that the application is valid and meets the core criteria, as stipulated in section 269C, the CEO must issue a written order declaring the goods eligible for a reduced customs duty rate.
Section 269C of the Act stipulates that for a TCO application to meet the core criteria, it must be the case that on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. When the CEO is satisfied that the application meets these criteria, they must make a written TCO under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
The obligations imposed by the Act on the CEO include accepting valid TCO applications, ensuring they meet the core criteria, and making written orders accordingly. Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes there are reasons against the TCO to lodge a submission. In the case of TCO No. 0923732, the CEO did not receive any submissions. The TCO is deemed to come into force on the day the application was lodged, as per subsection 269S(1).
Should a TCO be breached, the Act does not specify particular offences, penalties, or civil/criminal consequences for such breaches. However, it is implied that any misuse or non-compliance with the terms of a TCO could lead to legal ramifications, including potential penalties as outlined in the Customs Act 1901. The TCO does not affect the rights of any person, except to the extent that it benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.