EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116443
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.
Multiclad Facade Systems Pty Ltd applied for a TCO in respect of certain panels on 25 May 2011.
Instrument
TCO No 1116443 was made on 22 August 2011. It declares that those certain 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. 1116443 is taken to have come into force on 25 May 2011.
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, establishes a framework for the imposition of customs duties on imported goods. One aspect of this framework is the ability to grant tariff concession orders (TCOs) which provide for reduced or waived customs duties on certain goods. The Tariff Concession Instrument No. 1116443 was introduced on 22 August 2011 to provide a tariff concession for specific panels imported by Multiclad Facade Systems Pty Ltd. This instrument was enacted to address a gap in the tariff structure by providing a more favourable customs duty rate for these panels, thereby encouraging their importation and potentially benefiting the market for such goods. The policy objective, as outlined in the Act, is to ensure that no substitutable goods are produced in Australia, thus justifying the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 1116443 under the Customs Act 1901 applies to specific panels for which Multiclad Facade Systems Pty Ltd applied for a Tariff Concession Order (TCO). This instrument, which came into force on 25 May 2011, declares these panels as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a rate of duty of free, as opposed to the general rate of 5%. The instrument is applicable to the entity that made the application, in this case, Multiclad Facade Systems Pty Ltd, and any other entities importing similar panels after the application date. The Chief Executive Officer of Customs (CEO) was required to assess whether the application met the core criteria, including ensuring that no substitutable goods were produced in Australia at the time of application. The geographic reach of this Act is national, affecting all importers of the specified panels across Australia. The CEO is mandated to publish notices in the Gazette inviting submissions from interested parties, although no submissions were received in this instance. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person for actions taken before the TCO was registered.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1116443 are found in sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C establishes the core criteria for a Tariff Concession Order (TCO), which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, section 269P(3) mandates that the CEO must issue a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995, effectively granting a tariff concession. Section 269S(1) determines the commencement date of the TCO, which is the date on which the application was lodged.
The Act imposes several obligations on parties applying for a TCO. Firstly, applicants must ensure their applications meet the core criteria as outlined in section 269C, which includes verifying that no substitutable goods were produced in Australia on the application date. The CEO has the responsibility to review the application and confirm its validity, after which a written order must be issued if the criteria are met (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)), although no submissions were received in this case. Finally, the CEO must ensure that the rights of existing importers are not adversely affected by the TCO, and must allow for the possibility of duty refunds on goods imported since the TCO's effective date.
Under the Customs Act 1901, breaches of the provisions related to TCOs could lead to civil or criminal consequences. Although specific offences and penalties are not detailed within the explanatory statement, general provisions in the Act may apply. For instance, section 272 of the Act states that any person who contravenes any provision of the Act or the regulations is liable to a penalty, which may include fines or imprisonment, depending on the severity of the offence. In cases of civil penalties, section 126 of the Customs Regulations 1993 provides for financial penalties for non-compliance, with the exact amount determined by the nature and extent of the breach. It is important for applicants and the CEO to adhere to these obligations to avoid any legal repercussions.