EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028533
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.
The Trustee for Como Glasshouse Unit Trust applied for a TCO in respect of certain glasshouse structure parts on 28 June 2010.
Instrument
TCO No 1028533 was made on 20 September 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. 1028533 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, enacted by the Australian Parliament, provides a legislative framework for managing the importation and exportation of goods, including the imposition of customs duties. To address specific economic or trade policy objectives, the Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, enabling the Chief Executive Officer of Customs to apply reduced customs duty rates on certain goods. This mechanism aims to support industries by reducing the cost of imported goods that do not have substitutable Australian-produced alternatives. The Tariff Concession Instrument No. 1028533, issued on 20 September 2010, exemplifies this process by granting a tariff concession to certain glasshouse structure parts, effectively reducing their duty rate from 5% to free, provided that no substitutable goods were being produced in Australia at the time of application. The instrument came into effect on 28 June 2010, the date the application was lodged, and no submissions were received in opposition to its issuance.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Order No. 1028533, primarily concerns the reduction of customs duty rates for specific goods, in this case, certain glasshouse structure parts. This order applies to the Trustee for Como Glasshouse Unit Trust and any other entities or individuals involved in the importation of these specified parts. The Act’s application is nationwide, affecting all regions under the Commonwealth of Australia, as it pertains to customs duties which are a federal matter. The Act does not apply to goods listed in section 269SJ of the Act, which specifies items ineligible for tariff concessions. The order was made under the authority granted by section 269F of the Act and was effective from 28 June 2010, the date the application was lodged. The scope of the order can be further defined or modified through subordinate instruments, but no such amendments are mentioned in the explanatory statement. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, ensuring that the rights of importers are positively affected by enabling them to seek refunds for duties paid on these goods since the effective date of the order.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1028533 under the Customs Act 1901 (section 269F) involve the process by which a Tariff Concession Order (TCO) can be applied for and subsequently made by the Chief Executive Officer (CEO) of Customs. When an individual or entity applies for a TCO in respect of specific goods (section 269F), the CEO must determine if the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application is valid and meets the core criteria outlined in section 269C, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)).
The obligations under this Act are primarily on the applicant and the CEO. The applicant must ensure that the goods for which the TCO is sought do not fall under the categories specified in section 269SJ, and that the application meets the core criteria set out in section 269C. The CEO has the responsibility to review the application, determine if the goods meet the core criteria, and if satisfied, make the appropriate written order as a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested party to submit objections or reasons why the TCO should not be made (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 can lead to significant consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach, it is clear that the Act governs the tariff concession process rigorously. The potential for non-compliance could lead to legal challenges or disputes, particularly if the TCO is deemed to have been improperly granted. Given the nature of the Act, any breaches might also incur administrative penalties or result in the invalidation of the TCO, impacting the rights and liabilities of the involved parties. The potential penalties for such breaches would be determined based on the specific nature and severity of the non-compliance, but could include fines or other financial penalties as stipulated by the relevant legislation.