EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510934
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 0510934 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. 0510934 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 Customs Act 1901, enacted by the Australian Parliament, facilitates the application of lower rates of customs duty on certain goods through Tariff Concession Orders (TCOs). This legislation was introduced to address the need for a mechanism allowing for reduced customs duties under specific conditions, particularly where no substitutable goods are produced in Australia. The Customs Act 1901 outlines the process for applying for and granting a TCO, with the Chief Executive Officer of Customs (CEO) responsible for making these orders. The policy objective is to encourage the import of goods by reducing customs duty, provided no substitutable goods are produced domestically, thereby supporting trade and economic efficiency. The CEO must ensure that any application for a TCO meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business.
Scope and Application
The Tariff Concession Instrument No. 0510934, issued under the Customs Act 1901, applies to specific knitted fabrics, granting tariff concessions to Bed Protection Australia Pty Ltd by exempting them from the general rate of duty, which is 7.5%, thereby making the duty free. This concession applies to entities or individuals importing these particular knitted fabrics into Australia. The geographic reach of this Act is national, as it operates within the Commonwealth of Australia and affects all importers bringing the specified goods into the country. The Act does not explicitly mention exclusions or exemptions, but it does exclude certain goods listed in section 269SJ of the Customs Act 1901 from being subject to tariff concession orders. The application of the Act may be extended or restricted through subordinate instruments, which can provide further details on the specific criteria and conditions under which the tariff concessions are applied. The TCO does not affect any pre-existing rights or impose new liabilities on any person other than the Commonwealth, ensuring that it only benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0510934, made under the Customs Act 1901, are sections 269C, 269F, 269P, and 269S. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C stipulates the core criteria that must be met for the CEO to grant a TCO, specifically that no substitutable goods were produced in Australia at the time of the application. If these criteria are met, section 269P requires the CEO to issue a TCO, and section 269S outlines the commencement date of the TCO, which is the date the application was lodged.
The obligations imposed by this Act on the parties involved include the requirement for Bed Protection Australia Pty Ltd to submit a valid application for the TCO. The CEO must then assess whether the application meets the core criteria as outlined in section 269C. If the criteria are satisfied, the CEO must make a written TCO as per section 269P. Furthermore, the CEO is required to publish a notice in the Gazette under section 269K(1) inviting submissions from any interested parties who may object to the TCO. In this instance, no submissions were received.
Under the Customs Act 1901, breaches of the conditions specified in a TCO could lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties, it is understood that non-compliance with customs regulations can result in substantial fines, penalties, and potential imprisonment. The exact penalties would depend on the specific nature and severity of the breach, as outlined in the broader customs legislation.
Additionally, the Customs Act 1901 provides mechanisms for the importation of goods under a TCO, such as the right to apply for a refund of duty under regulation 126(1)(r) for goods imported since the TCO's effective date. This provision ensures that importers can benefit from the reduced duty rates specified in the TCO. Importantly, the TCO does not affect the rights of any person in respect of actions taken before the TCO's effective date, nor does it impose any new liabilities on individuals or entities.