EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502126
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.
Kimberly-Clark Australia Pty Ltd applied for a TCO in respect of certain elastic filaments nonwovens on 16 February 2005.
Instrument
TCO No 0502126 was made on 6 May 2005. It declares that those certain elastic filaments nonwovens 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 3%.
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. 0502126 is taken to have come into force on 16 February 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 Australian Parliament, provides a framework for the administration of customs duties and the regulation of the importation and exportation of goods. In 2005, the Tariff Concession Instrument No. 0502126 was introduced to address the need for tariff concessions on specific goods, allowing for a reduction in customs duty for those goods. This instrument was developed under the authority granted by the Customs Act, particularly through the mechanism of Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs. The primary objective of this legislation is to provide tariff relief to importers of certain goods, in this case, elastic filaments nonwovens, thereby facilitating trade and potentially stimulating economic activity by reducing the cost of importing these goods. The instrument was effective from the date the application was lodged, ensuring that importers could benefit from the reduced duty rates immediately upon the application's acceptance.
Scope and Application
The Tariff Concession Instrument No. 0502126, enacted under the Customs Act 1901, applies to the concession of customs duty rates for specific goods, in this case certain elastic filaments nonwovens. The Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for making Tariff Concession Orders (TCOs) that reduce the rate of customs duty for goods that meet certain criteria, such as the absence of substitutable goods produced in Australia. The TCOs are made in accordance with the provisions set out in Part XVA of the Customs Act 1901 and are subject to the conditions specified in section 269F. The geographic and jurisdictional reach of this legislation is national, applying across Australia as per the Commonwealth's authority under the Customs Act 1901. The exclusions and exemptions are delineated in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Any additional application or restrictions of the Act may be detailed in subordinate instruments, although the primary legislation provides the foundational criteria and scope.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0502126 under the Customs Act 1901 (section 269C) require the Chief Executive Officer (CEO) of Customs to consider applications for Tariff Concession Orders (TCOs) for specific goods. If the CEO is satisfied that the application meets the core criteria, particularly that no substitutable goods are produced in Australia, the CEO must issue a written TCO. The instrument, in this case, declares that certain elastic filaments nonwovens are subject to a TCO, which applies item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The general rate of customs duty for these goods is reduced from 5% to 3% under the TCO.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess applications for TCOs against the core criteria. This involves determining whether any substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any person who might have reasons against the issuance of a TCO. In this instance, the CEO did not receive any submissions in response to the published notice. The TCO’s commencement date is the same as the date the application was lodged, ensuring that the benefits of the concession apply retroactively to the date of the application.
There are no explicit provisions in the legislation regarding offences, penalties, or civil/criminal consequences for breach of the TCO provisions. However, the application of the TCO and the reduction in customs duty rates are contingent on compliance with the core criteria. Non-compliance or misrepresentation in the application process could potentially lead to the TCO being revoked or deemed invalid, thereby reverting the duty rates to the original higher rate. Importers who have already paid the reduced duty rate may be required to repay any excess duty if the TCO is subsequently found to be invalid.