EXPLANATORY STATEMENT
Customs By-law No. 1303862
Customs Act 1901
Section 271 of the Customs Act 1901 (the Act) provides, in part, that where an item of a Customs Tariff is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law, the Chief Executive Officer of Customs may make by-laws for the purposes of that item. A Customs Tariff is defined in section 4 of the Act to mean an act imposing duties of customs. The Customs Tariff Act 1995 (the Customs Tariff Act) is a Customs Tariff for the purposes of the Act.
Background
The Customs Tariff Amendment (Schedule 4) Act 2012 will repeal the existing Schedule 4 of the Customs Tariff Act and replace it with a new Schedule 4. As part of this process, new by-laws are required for all items that provide for goods to be prescribed by by-law.
Item 32 in new Schedule 4 replaces item 40A of the previous Schedule 4 to the Customs Tariff Act. Item 32 provides that textiles, clothing and footwear, as prescribed by by-law are dutiable at the rate of “Free”.
New By-law No. 1303862 replaces previous By-law No. 1134478.
Instrument
By-law No. 1303862 prescribes fabrics classified under headings 5007, 5111, 5112, 5208, 5210, 5212, 5407, 5408, 5512, 5513, 5515 or 5516 in Schedule 3.
The fabric must weigh less than 125 grams per square metre and be for use in one of the following circumstances:
(a) be for use in a clothing factory in the manufacture of bias binding or piping or be for use in a clothing factory in the manufacture of goods which would be classified in Chapter 62 in Schedule 3; or
(b) be for use in the manufacture of headwear which, if imported, would be classified under 6505.00.90 in Schedule 3; or
(c) if the fabric has a width of less than 115 cm, be for any use other than a manufacturing purpose.
Consultation
No consultation was undertaken in relation to By-law No. 1303862 as it does not alter existing arrangements.
Human Rights Implications
This by-law does not engage, impact on, or limit in any way, the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights at section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Commencement
By-law No. 1303862 takes effect on and from the date that the Customs Tariff Amendment (Schedule 4) Act 2012 commences, that is 1 March 2013.
Overview
The Customs By-law No. 1303862 was enacted in 2013 under the authority of the Customs Act 1901. This by-law was introduced to address the need for updated regulations following the amendment of Schedule 4 of the Customs Tariff Act 1995 by the Customs Tariff Amendment (Schedule 4) Act 2012. This amendment necessitated new by-laws to reflect the changes in the tariff rates for certain goods, specifically textiles, clothing, and footwear. The Customs By-law No. 1303862 replaces the previous By-law No. 1134478, prescribing fabrics classified under specific headings in Schedule 3 that are dutiable at a rate of "Free" if they meet certain conditions regarding weight and intended use. The policy objective is to ensure that the new by-law aligns with the updated tariff schedule and maintains the integrity of the customs duties regime. The by-law came into effect on 1 March 2013, the same date the amending act commenced.
Scope and Application
The Customs By-law No. 1303862 applies to fabrics classified under specific headings in Schedule 3 and meeting certain criteria, including weight and intended use. These fabrics must weigh less than 125 grams per square metre and be intended for use in various specified circumstances, such as manufacturing bias binding or piping, producing clothing items classified in Chapter 62, or creating headwear classified under 6505.00.90. Additionally, fabrics with a width of less than 115 cm are applicable if they are not intended for manufacturing purposes. The by-law's application is limited to the geographic jurisdiction of Australia, as it is enacted under the Customs Act 1901, which governs the country's customs regulations. No consultation was undertaken as this by-law does not alter existing arrangements. It is important to note that this by-law does not engage or limit any human rights as defined in the Human Rights (Parliamentary Scrutiny) Act 2011. The by-law takes effect from 1 March 2013, aligning with the commencement of the Customs Tariff Amendment (Schedule 4) Act 2012.
Key Provisions
The main operative sections of By-law No. 1303862 (section 271 of the Customs Act 1901) detail the specific fabrics prescribed to be dutiable at the rate of “Free” under the new Schedule 4. This by-law replaces By-law No. 1134478 and applies to fabrics classified under headings 5007, 5111, 5112, 5208, 5210, 5212, 5407, 5408, 5512, 5513, 5515, or 5516 in Schedule 3. To qualify for the “Free” duty rate, these fabrics must meet certain criteria, including a weight of less than 125 grams per square metre and intended use in a clothing factory for manufacturing bias binding, piping, or goods classified in Chapter 62; for manufacturing headwear classified under 6505.00.90; or, if the fabric width is less than 115 cm, for any use other than manufacturing purposes.
The obligations and requirements imposed by By-law No. 1303862 on the parties or entities it governs include ensuring that the prescribed fabrics meet the specified weight and use criteria. Importers and manufacturers must verify that the fabrics they are dealing with conform to the by-law’s requirements to qualify for the “Free” duty rate. This involves checking the fabric classification under the appropriate headings in Schedule 3, ensuring the weight does not exceed the specified limit, and confirming that the intended use aligns with one of the prescribed circumstances.
Failure to comply with By-law No. 1303862 may result in civil or criminal consequences, depending on the nature and severity of the breach. Under the Customs Act 1901, breaches can lead to penalties, which may include fines. The maximum penalties for customs-related offences are set out in the Act and can vary based on the offence's seriousness. For example, individuals or entities found to have knowingly imported non-compliant goods could face substantial fines, while more severe breaches may result in criminal charges and potential imprisonment. Compliance with the by-law is essential to avoid these penalties and ensure lawful trade practices.