EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512084
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.
Kellee Williamson applied for a TCO in respect of certain organic cotton nappies on 9 September 2005.
Instrument
TCO No 0512084 was made on 25 November 2005. It declares that those certain organic cotton nappies 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 17.5%. 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 269SA(2) (b) relevantly provides that a TCO is to be taken to have come into force on the day on which the local manufacturer ceased production of substitutable goods. Accordingly, TCO No. 0512084 is taken to have come into force on 9 September 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. 0512084, enacted under the Customs Act 1901, addresses the gap in tariff concessions for certain organic cotton nappies. This instrument was introduced to provide a lower rate of customs duty on these goods, specifically to ensure that they are not subject to the general duty rate of 17.5%. This concession was granted after Kellee Williamson applied for a tariff concession order on 9 September 2005, and the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria under section 269C of the Act. The policy objective was to facilitate the importation of these goods without the burden of the higher duty rate, thereby benefiting importers and potentially boosting the market for organic cotton products.
Scope and Application
The Tariff Concession Instrument No. 0512084 applies to the goods specified within it, namely certain organic cotton nappies, and operates under the framework set out in Part XVA of the Customs Act 1901. This Act applies to the Chief Executive Officer of Customs, who is responsible for making decisions on Tariff Concession Orders (TCOs) for particular goods, in this case Kellee Williamson’s application for organic cotton nappies. The application was made on 9 September 2005, and the TCO was issued on 25 November 2005, following a determination that no substitutable goods were produced in Australia, thereby satisfying the core criteria under section 269C of the Act. The TCO provides for these specific organic cotton nappies to be subject to a zero rate of duty, as opposed to the general rate of 17.5%. The TCO’s application is effective from the date the local manufacturer ceased production of substitutable goods, which is 9 September 2005, as per the provisions of subsection 269SA(2)(b) of the Act. This instrument does not disadvantage any person, nor does it impose liabilities on anyone except the Commonwealth, and it allows for the refund of duty on goods imported since the commencement date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0512084, as outlined in the Customs Act 1901, pertain to the establishment and effects of Tariff Concession Orders (TCOs) (sections 269F, 269C, 269B, 269P(3), 269K(1), and 269SA(2)(b)). Section 269F allows an individual to apply for a TCO for certain goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. For a TCO to be granted, the CEO must determine that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269C and 269B. If these criteria are met, the CEO issues a written order under section 269P(3), which specifies that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, effectively applying a lower rate of customs duty or making the goods duty-free.
The obligations imposed by this Act on the parties it governs include the requirement for applicants to ensure their goods meet the criteria for a TCO, such as the absence of substitutable goods in Australia. The CEO is obligated to assess applications against these criteria and, if satisfied, to make a written order. The CEO must also publish a notice in the Gazette (section 269K(1)) inviting submissions from any person who believes the TCO should not be granted, although no submissions were received in this case. Importers of the goods in question are entitled to apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the conditions or obligations set out in the Customs Act 1901 could result in civil or criminal consequences. Although specific offences, penalties, or consequences for breach are not detailed in this particular explanatory statement, general provisions of the Act and associated regulations may impose penalties for non-compliance, including fines and potential imprisonment. The maximum penalties can vary depending on the severity and nature of the breach, as outlined in the relevant sections of the Customs Act and associated legislative instruments. It is essential for all parties involved to adhere strictly to the requirements to avoid any potential legal repercussions.