EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509430
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.
Uvex Safety Australia Pty Ltd applied for a TCO in respect of certain Towelletes on 14 July 2005.
Instrument
TCO No 0509430 was made on 30 September 2005. It declares that those certain Towelletes 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 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. 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. 0509430 is taken to have come into force on 14 July 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 Tariff Concession Instrument No. 0509430 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this case, certain Towelletes. The instrument was created in response to an application by Uvex Safety Australia Pty Ltd, which sought a lower rate of customs duty on these goods, from the standard rate of 5% to a concessional rate of 0%. The enacting body, the Chief Executive Officer of Customs, was satisfied that the application met the core criteria stipulated in the Customs Act, namely that no substitutable goods were produced in Australia at the time of the application.
The policy objective, as outlined in the Act, is to facilitate the importation of goods that are not domestically produced and thus to support the competitiveness of Australian businesses by lowering the cost of importing certain goods. This instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the date the concession was taken to have come into force, without imposing any liabilities on any person. The instrument came into effect on 14 July 2005, the date on which the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. The Act applies to any person or entity that can demonstrate that the goods for which a TCO is sought are not substitutable by goods produced in Australia in the ordinary course of business, and that these goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. This provision is geographically applicable across Australia, as it operates under the Commonwealth's jurisdiction. The Act allows for the CEO to make a TCO if no submissions are received against the application, following a Gazette notice inviting objections. The TCO No. 0509430, for instance, was made on 30 September 2005, for certain Towelletes, reducing their duty from 5% to 0%, effective from 14 July 2005, the date the application was lodged. The TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth, thereby ensuring that the rights of importers are beneficially impacted from the date of its registration.
Key Provisions
The primary operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, and 269P. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C stipulates that an application for a TCO meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B provides definitions for terms such as "goods produced in Australia" and "substitutable goods," while section 269P requires the CEO to make a written order declaring the goods subject to a prescribed rate of duty if the application meets the core criteria.
The Act imposes specific obligations on applicants and the CEO. Applicants must ensure that their applications comply with the criteria outlined in sections 269F and 269C, specifically demonstrating that no substitutable goods were produced in Australia at the time of application. The CEO is mandated to review the application, make a written order if the criteria are met, and publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). The CEO must also decide whether the application meets the core criteria under section 269C, which involves verifying the absence of substitutable goods produced in Australia.
Breach of the requirements under the Customs Act 1901 can result in civil or criminal penalties. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally can lead to fines, imprisonment, or both, depending on the severity and intent of the violation. For instance, knowingly making a false statement in an application for a TCO could result in substantial fines or imprisonment. However, the explanatory statement does not specify maximum penalties for this particular instrument, so one would need to refer to the broader customs regulations and relevant case law for precise details.