EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009473
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.
Obrien Glass Industries applied for a TCO in respect of certain passenger motor vehicles safety glass on 23 February 2010.
Instrument
TCO No 1009473 was made on 14 May 2010. It declares that those certain passenger motor vehicles safety 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. 1009473 is taken to have come into force on 23 February 2010.
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 Commonwealth Parliament, includes a provision for the creation of Tariff Concession Orders (TCOs) under Part XVA. These TCOs allow for the application of a lower rate of customs duty on certain goods, provided that they meet specified criteria. The introduction of this Act aimed to address the gap in tariff regulation by offering a mechanism for tariff reductions on specific goods, thereby facilitating trade and potentially benefiting local businesses and consumers. The Tariff Concession Instrument No. 1009473, made in 2010, exemplifies the application of this scheme, specifically addressing the need for reduced customs duties on certain passenger motor vehicle safety glass. The process involves an application to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria before issuing a written order. In this case, the CEO determined that no substitutable goods were produced in Australia, allowing the application to proceed, ultimately setting the duty rate for these specific goods at free, compared to the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 1009473 applies specifically to certain passenger motor vehicles safety glass, as declared by the Chief Executive Officer of Customs under section 269F of the Customs Act 1901. This instrument provides a concession on the customs duty rate for these goods, reducing it from the general rate of 5% to a rate of free. The Act applies to any person or entity seeking to import these goods, with the condition that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia and is enforced under the Commonwealth's authority. Any exclusions or exemptions from this concession are detailed in section 269SJ of the Act, which specifies goods that cannot be subject to a Tariff Concession Order. The instrument does not extend or restrict its application through subordinate instruments, but the scope of the concession is defined by the core criteria outlined in section 269C of the Act.
Key Provisions
The Customs Act 1901 establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (section 269F). A TCO can lower the customs duty on specific goods, provided the application meets certain criteria. An application for a TCO is considered valid if the goods in question are not listed in section 269SJ, and if no substitutable goods are produced in Australia (section 269C). The definitions of key terms such as 'substitutable goods', 'ordinary course of business', and 'goods produced in Australia' are provided in sections 269B, 269D, and 269E respectively. If the CEO determines that the application meets the core criteria, they must issue a written TCO, specifying the reduced duty rate (section 269P(3)).
The obligations imposed by the Customs Act 1901 on the parties involved are multifaceted. The CEO must accept a TCO application if it is valid and meets the core criteria, then issue a written order. Additionally, upon accepting a valid TCO application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not proceed (subsection 269K(1)). Importers, in particular, are afforded certain benefits, such as the ability to apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations). The Act ensures that the TCO does not retroactively affect the rights of any person or impose liabilities for actions taken before the TCO's effective date.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can lead to various consequences. While the specific offences and penalties are not detailed in the explanatory statement, it is clear that any breach of the Act or regulations could result in civil or criminal penalties. The maximum penalties for such breaches are not explicitly stated but would typically be determined by the relevant laws governing customs and taxation in Australia. Compliance with the Act is crucial to avoid any legal repercussions or financial liabilities.
In summary, the Customs Act 1901 outlines a structured process for issuing TCOs that reduce customs duty on specific goods, provided the application meets the outlined criteria. The CEO has the authority to accept valid applications, issue TCOs, and ensure that the rights of all parties are protected. Any failure to comply with the Act or its regulations can result in significant civil or criminal penalties, underscoring the importance of adherence to the established procedures.