EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923734
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 0923734 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. 0923734 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 Tariff Concession Order No. 0923734 was introduced under the Customs Act 1901, enacted by the Australian Parliament, to provide a lower rate of customs duty on specific goods. This was necessary to address a gap in the duty structure for certain imports, ensuring that Australian businesses could compete effectively in the global market without being unfairly disadvantaged by high import tariffs. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders, subject to certain criteria, which was designed to promote fair trade practices by reducing the duty on goods for which there are no substitutable Australian-produced alternatives. The objective of this particular order, as stated in the explanatory statement, was to offer tariff relief on certain rolled glass, thus facilitating the importation of these goods at a reduced duty rate, thereby benefiting importers and potentially lowering costs for end consumers.
Scope and Application
The Tariff Concession Instrument No. 0923734, under the Customs Act 1901, applies to any entity seeking a tariff concession order (TCO) for goods that do not have a substitutable Australian-produced equivalent. The Act applies to both individuals and entities that meet the criteria specified in sections 269C, 269D, and 269E. The CEO of Customs is mandated to evaluate applications to ensure they do not pertain to goods excluded under section 269SJ. Upon satisfying the core criteria outlined in section 269C, the CEO issues a TCO, granting preferential customs duty rates to the specified goods. This instrument extends across the Commonwealth of Australia, affecting all states and territories uniformly. The legislation does not specify any exclusions beyond those outlined in section 269SJ, and no exemptions or thresholds are mentioned in the explanatory statement. The application of the Act may be further defined or refined through subordinate instruments, ensuring its adaptability to specific circumstances.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) under the Customs Act 1901 (section 269F) allow the Chief Executive Officer (CEO) of Customs to grant tariff concessions on certain goods. If the CEO determines that the application for a TCO meets the core criteria (section 269C), they must make a written order that specifies the reduced rate of duty applicable to the goods in question. For this particular TCO, the CEO declared that certain rolled glass, subject to the application, are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with a reduced rate of duty from 5% to free (section 269P(3)). The TCO is effective from the date the application was lodged, which in this case was 7 July 2009 (subsection 269S(1)).
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must also determine whether the application meets the core criteria (section 269C) and subsequently make a written TCO if satisfied. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO (subsection 269K(1)). In this case, no objections were received. The TCO ensures that it does not disadvantage any person or impose liabilities for actions taken before the TCO was registered (subsection 269S(2)).
For breach of the Customs Act 1901, various civil and criminal penalties may apply. The Act does not specify particular penalties for breach of TCO provisions; however, general penalties for breaches of the Customs Act can include fines and imprisonment. The maximum penalty for contravening the Customs Act can be substantial, with fines up to 10,000 penalty units and/or imprisonment for up to five years for serious offences. For less serious breaches, penalties can include fines up to 1,100 penalty units and/or imprisonment for up to 12 months. These penalties reflect the severity of the breach and the potential economic impact of non-compliance.
It is important to note that the TCO itself does not impose any liabilities on any person, ensuring that the rights of importers will be beneficially affected. Under the Customs Act, importers of goods subject to the TCO can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). This provision ensures that any financial burden associated with the duty reduction is borne by the Commonwealth rather than the importer.
In conclusion, the TCO under the Customs Act 1901 provides a mechanism for the CEO to grant tariff concessions on specific goods, provided the application meets the core criteria and does not pertain to goods excluded under section 269SJ. The CEO must follow a transparent process by publishing notices in the Gazette and considering any submissions received. While the Act does not specify penalties for breach of TCO provisions, general penalties for breaches of the Customs Act include fines and imprisonment, reflecting the seriousness of non-compliance. Importantly, the TCO ensures that it does not disadvantage any person and allows for the beneficial treatment of importers.