EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014366
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.
CSR Building Products Limited applied for a TCO in respect of certain building panels on 24 March 2010.
Instrument
TCO No 1014366 was made on 18 June 2010. It declares that those certain building 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. 1014366 is taken to have come into force on 24 March 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 Tariff Concession Instrument No. 1014366, enacted in 2011 under the Customs Act 1901, addresses the need to provide tariff concessions for specific imported goods, thereby facilitating trade and potentially benefiting the importing industry. This instrument was introduced by the Chief Executive Officer of Customs, following an application by CSR Building Products Limited for a tariff concession order concerning certain building panels. The primary objective of this legislation, as stated in the explanatory statement, is to grant a tariff concession that reduces the customs duty on these particular building panels from the general rate of 5% to a free rate, provided no substitutable goods were produced in Australia at the time of the application. The instrument became effective on the date of the application, 24 March 2010, and does not disadvantage any party or impose new liabilities, while allowing importers to apply for duty refunds for goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 1014366, made under the Customs Act 1901, applies specifically to certain building panels for which CSR Building Products Limited applied for a tariff concession order. The instrument was enacted to provide a lower rate of customs duty on these specified goods, with the duty rate reduced to free from the general rate of 5%. The Act applies to any person or entity seeking to import these building panels into Australia, provided that no substitutable goods are being produced in Australia. The scope of this legislation is confined to the particular goods specified in the application and does not extend to other goods unless similarly applied for and approved. The instrument's jurisdictional reach is national, as it is part of the Commonwealth's customs legislation. There are exclusions, as outlined in section 269SJ of the Act, which specify goods that cannot be subject to a tariff concession order. The commencement date of this instrument is the day the application was lodged, 24 March 2010, and it does not disadvantage any person other than the Commonwealth or impose liabilities for actions taken prior to its registration. The instrument also allows for the potential refund of duty paid on these goods imported since the effective date of the concession.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1014366 (TCO No 1014366) are found in Part XVA of the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application is deemed not to be in relation to goods specified in section 269SJ, the CEO must determine whether the application meets the core criteria outlined in section 269C. If satisfied, the CEO must issue a written order (a TCO) stating that the goods are subject to a prescribed rate of customs duty as specified in Schedule 4 to the Customs Tariff Act 1995. In this case, TCO No 1014366 specifies that certain building panels are subject to a duty rate of free, as opposed to the general rate of 5%.
The Customs Act 1901 imposes several obligations and requirements on the parties involved in the TCO process. Firstly, applicants must ensure that their applications comply with the stipulations in section 269F and that the goods in question are not those listed in section 269SJ. The CEO, on receiving a valid application, is obligated to determine whether the application meets the core criteria, as per sections 269C and 269P(3). If the criteria are met, the CEO must issue a TCO, as mandated by section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not proceed. In this instance, no submissions were received.
Under the Customs Act 1901, any breach of the provisions related to TCOs can lead to significant consequences. While the specific penalties for non-compliance are not detailed in the explanatory statement, breaches of customs regulations generally can result in both civil and criminal penalties. Civil penalties may include fines, restitution, or other financial penalties, while criminal penalties can include imprisonment, depending on the severity and intent of the breach. For instance, knowingly making false statements in an application or providing misleading information can result in substantial fines and/or imprisonment. The exact penalties would be determined by the relevant courts and could vary based on the circumstances of the offence.