EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028503
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.
Como Glasshouse applied for a TCO in respect of certain glasshouse structure parts on 28 June 2010.
Instrument
TCO No 1028503 was made on 13 October 2010. It declares that those certain glasshouse structure parts 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. 1028503 is taken to have come into force on 28 June 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 was enacted by the Australian Parliament to establish a framework for regulating the importation and exportation of goods, including the imposition of customs duties. The act was introduced to address the need for a comprehensive legislative approach to customs regulation, ensuring that duties are applied fairly and efficiently. Part XVA of the Customs Act 1901, which was introduced to facilitate tariff concession orders, aims to provide relief from customs duties for certain imported goods under specific conditions. This mechanism allows for the reduction or exemption of customs duty on goods where it is determined that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 1028503, enacted in 2010, exemplifies this process by granting a tariff concession for certain glasshouse structure parts, reducing the duty from the general rate of 5% to free. This instrument was made following an application by Como Glasshouse and after satisfying the criteria set out in the act, including ensuring no objections were raised during the consultation period.
Scope and Application
The Customs Act 1901 applies to any person or entity involved in the importation or exportation of goods in Australia. Specifically, the Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) for goods that meet certain criteria, effectively reducing or eliminating the customs duty on these goods. This legislation is applicable nationally across Australia, providing a streamlined process for entities to apply for tariff concessions on specific goods, thereby potentially lowering their import costs. The Act excludes certain goods from being subject to a TCO, as specified in section 269SJ. The application process and the conditions for granting a TCO are outlined in sections 269C, 269B, and 269D of the Act. Furthermore, the Act ensures that the implementation of a TCO does not adversely affect the rights of any person, except the Commonwealth, regarding actions taken before the order's registration. The rights of importers are positively affected, as they may apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The key provisions of this legislation, specifically Tariff Concession Instrument No. 1028503, revolve around the granting of tariff concessions on certain goods. Section 269F of the Customs Act 1901 allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application is valid and that no substitutable goods are produced in Australia, the CEO must issue a TCO (sections 269C and 269SJ). The CEO must also publish a notice in the Gazette inviting submissions on the application, although no submissions were received in this instance (subsection 269K(1)). The TCO will apply from the date the application was lodged (subsection 269S(1)). For this specific case, the TCO No. 1028503 concerns certain glasshouse structure parts, applying item 50 of Schedule 4 to the Customs Tariff Act 1995, and reducing the duty rate from 5% to free.
The Customs Act 1901 imposes certain obligations on the parties involved in the TCO process. The CEO is required to assess applications for TCOs and determine if they meet the core criteria, which include ensuring that no substitutable goods are produced in Australia (section 269C). If the application meets these criteria, the CEO must issue a TCO. The CEO is also required to publish a notice in the Gazette to invite submissions from interested parties, although no submissions are mandatory for the TCO to proceed (subsection 269K(1)). Additionally, importers of the goods subject to the TCO may apply for a refund of duty paid prior to the TCO's effective date (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 can lead to various consequences. While the Act does not explicitly detail offences or penalties for breaches related to TCOs, general provisions within the Customs Act and associated regulations may apply. For example, breaches of the Customs Act can result in civil penalties, including fines, or criminal penalties, including imprisonment, depending on the severity of the breach. The maximum penalties for specific offences are detailed in the relevant sections of the Customs Act and associated regulations, but these are not specified in the context of TCOs in this particular legislation.