EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510933
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.
Bed Protection Australia Pty Ltd applied for a TCO in respect of certain knitted fabrics on 29 August 2005.
Instrument
TCO No 0510933 was made on 11 November 2005. It declares that those certain knitted fabrics 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 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. 0510933 is taken to have come into force on 29 August 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. 0510933, enacted in 2005 under the Customs Act 1901, addresses the problem of providing tariff concessions for specific goods not produced in Australia. This instrument was introduced to facilitate the application process for tariff concessions, ensuring that the Chief Executive Officer of Customs can appropriately assess and approve applications that meet the core criteria for such concessions. The policy objective of this instrument is to allow for reduced customs duties on goods that are not domestically produced and for which there are no substitutable alternatives, thereby encouraging importation and potentially stimulating economic activity related to these goods.
The Australian Parliament enacted this instrument to streamline the process of granting tariff concessions, ensuring that the rights of existing importers are protected and no new liabilities are imposed on any party. The instrument was designed to be effective from the date of application, providing immediate benefits to importers who apply for refunds of duty on the relevant goods. No submissions opposing the tariff concession were received, indicating broad acceptance of the measure’s necessity and appropriateness.
Scope and Application
The Tariff Concession Instrument No. 0510933 under the Customs Act 1901 applies to the concession of customs duty rates for certain knitted fabrics, specifically those applied for by Bed Protection Australia Pty Ltd. This instrument is applicable to the particular goods specified in the instrument, and its effect is to grant these goods a tariff concession, reducing the general rate of duty from 7.5% to free. The application of this instrument is limited to the goods as defined in the instrument, and it does not extend to any other goods not specified within it. The instrument operates on a federal level across Australia, as it is an instrument under the Commonwealth's Customs Act 1901. There are exclusions, as outlined in section 269SJ of the Act, which specify goods that cannot be subject to a TCO. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The instrument came into force on the date the application was lodged, which is 29 August 2005. Any subordinate instruments or regulations further defining terms or expanding on the application of this instrument would need to be referenced within the Customs Act 1901 and related legislation.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0510933, under the Customs Act 1901, pertain to the process and criteria for granting tariff concession orders (TCOs). Specifically, section 269F allows an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must then determine if the application meets the core criteria as outlined in section 269C. This section requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these core criteria, a written order is to be made under section 269P(3), declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily focused on ensuring compliance with the conditions for granting a TCO. The CEO must assess whether the application complies with the core criteria, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is also required to publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission, as stipulated in subsection 269K(1). Additionally, the CEO must ensure that the TCO does not affect the rights of any person adversely or impose any liabilities on any person in respect of actions taken before the date of registration, in accordance with subsection 269S(1).
Any failure to comply with the requirements of the Act may result in civil or criminal consequences. However, the explanatory statement does not specify the exact nature of these consequences or the penalties associated with non-compliance. The focus of the legislation seems to be more on the procedural correctness and the substantive criteria for granting TCOs rather than detailing the enforcement mechanisms and penalties for breaches. The absence of explicit mention of offences, penalties, or specific civil/criminal consequences suggests that the primary concern of the legislation is on the proper administration of tariff concessions rather than punitive measures for non-compliance.