EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0501207
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.
Oliver Footwear Pty Ltd applied for a TCO in respect of certain footwear uppers on 25 January 2005.
Instrument
TCO No 0501207 was made on 23 May 2005. It declares that those certain footwear uppers 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 7.5%. The rate of duty for the goods subject to the TCO is 0%.
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. Three submission objecting to the TCO application was received from Rossiters Pty Ltd, Global Footwear Manufacturers Pty Ltd and Slatters Pty Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Rossiters Pty Ltd, Global Footwear Manufacturers Pty Ltd and Slatters Pty Ltd to lodge a written submission.
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. 0501207 is taken to have come into force on 25 January 2005.
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 Commonwealth Parliament, addresses the need for a structured approach to tariff concessions for specific goods, thereby promoting fair trade practices and economic efficiency. This legislation enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that apply reduced customs duties to goods that meet specific criteria, such as the absence of substitutable goods produced in Australia. The Act aims to provide a streamlined process for businesses to apply for tariff concessions, ensuring that the concessions are granted fairly and transparently. Tariff Concession Instrument No. 0501207, issued on 23 May 2005, is an example of how the Act is applied, demonstrating the procedure for assessing applications and the consideration of objections from interested parties. This process helps to ensure that tariff concessions are appropriately granted, balancing the interests of applicants and potential objectors in the broader context of trade regulation.
Scope and Application
The Tariff Concession Instrument No. 0501207, made under section 269F of the Customs Act 1901, applies to any entity or individual seeking tariff concessions for goods imported into Australia. Specifically, the instrument addresses applications for Tariff Concession Orders (TCOs) to alter the customs duty rates for certain goods, in this case, certain footwear uppers, thereby affecting the import duties for those specified goods. The instrument is a Commonwealth instrument and thus has a national jurisdictional reach, applying across all states and territories of Australia. Notably, the TCO does not apply to goods specified in section 269SJ of the Customs Act 1901, which excludes certain goods from tariff concessions. The instrument is effective from the date the application was lodged, 25 January 2005, and does not retroactively affect the rights or impose liabilities on anyone other than the Commonwealth concerning actions taken before its registration. Additionally, the process for making a TCO includes a requirement for the CEO to consult with interested parties, as evidenced by the submissions received from Rossiters Pty Ltd, Global Footwear Manufacturers Pty Ltd, and Slatters Pty Ltd.
Key Provisions
The Tariff Concession Instrument No. 0501207 under the Customs Act 1901 allows the Chief Executive Officer of Customs (CEO) to implement lower customs duty rates on specified goods through Tariff Concession Orders (TCOs). According to section 269F, a person may apply to the CEO for a TCO for goods, provided they are not specified in section 269SJ, which lists goods ineligible for TCOs. If the application meets the core criteria in section 269C, the CEO must issue a TCO if satisfied that no substitutable goods were produced in Australia on the day the application was lodged. The TCO, as seen in TCO No. 0501207, specifies that certain footwear uppers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby applying a duty rate of 0% instead of the general rate of 7.5%.
The Act imposes obligations on the CEO to evaluate TCO applications and ensure they meet the core criteria as defined by sections 269C, 269D, 269E, and 269P(3). The CEO must also consult with relevant parties by publishing notices in the Gazette under section 269K(1) and inviting submissions from those who might oppose the TCO. This process ensures transparency and allows for objections to be considered before the TCO is issued. Additionally, under section 269M(1), the CEO can directly invite specific parties to submit written submissions if they are likely to oppose the TCO, as demonstrated in the case of TCO No. 0501207 where submissions were received from Rossiters Pty Ltd, Global Footwear Manufacturers Pty Ltd, and Slatters Pty Ltd.
Failure to comply with the requirements of the Customs Act 1901 and associated regulations could result in various penalties. Under section 273 of the Act, a person who makes a false or misleading statement in an application for a TCO may face imprisonment for up to two years, a fine of up to 10,000 penalty units, or both. Additionally, the Act provides for civil and criminal consequences for any breach of the Act’s provisions, including potential fines and imprisonment, depending on the severity and intent behind the breach. The Act's regulatory framework aims to ensure that the TCO process is fair, transparent, and effectively administered.