EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512087
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 Fabric on 12 September 2005.
Instrument
TCO No 0512087 was made on 5 December 2005. It declares that those certain Fabric 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. 0512087 is taken to have come into force on 12 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. 0512087 was enacted in 2005 as part of the Customs Act 1901. This instrument was introduced to address the need for tariff concessions on specific goods, allowing for lower rates of customs duty to be applied. This is achieved through the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, subject to certain conditions being met, such as the absence of substitutable goods produced in Australia at the time of application. The primary objective of this legislation, as outlined in the explanatory statement, is to ensure that tariff concessions are granted fairly and transparently, with an opportunity for public consultation on proposed orders.
The instrument was developed in response to an application by Kimberly Clark Australia Pty Ltd for tariff concessions on certain fabrics. The CEO of Customs determined that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO, and subsequently issued Instrument No. 0512087, which took effect from the date the application was lodged. This specific TCO reduced the duty on the specified fabrics from a general rate of 5% to 0%. The process involved public consultation, though no submissions were received against the proposed concession. This instrument ensures that the rights of importers are protected and that no liabilities are imposed on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0512087 under the Customs Act 1901 applies to specific goods for which an application for tariff concession has been made and approved by the Chief Executive Officer of Customs. This Act is concerned with the process of granting tariff concessions to importers of goods, allowing them to benefit from a lower rate of customs duty if certain criteria are met. The legislation applies to any entity or individual seeking to import goods that qualify for tariff concessions, provided those goods are not specified as ineligible in section 269SJ of the Act. The Act operates within the national jurisdiction of Australia, as it is a Commonwealth Act. The instrument extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the reduced duty rates applicable to goods subject to a tariff concession order. The instrument also ensures that the concession does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the order's registration.
Key Provisions
The primary operative sections of this legislation, as per the Customs Act 1901, include section 269F which allows an application for a Tariff Concession Order (TCO) to be made to the Chief Executive Officer of Customs (section 269F). Section 269C stipulates the core criteria that must be satisfied for a TCO to be considered, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, section 269P(3) mandates that if these criteria are met, a written TCO must be issued (section 269P(3)).
In accordance with the Customs Act 1901, the CEO of Customs has the obligation to assess applications for TCOs against the specified core criteria. If satisfied that the criteria are met, the CEO is required to issue a TCO, which will then apply a reduced rate of customs duty on the specified goods. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1) of the Act (section 269K(1)). This publication ensures transparency and provides an opportunity for public input.
Under the Act, breaches or non-compliance with the provisions governing TCOs can result in civil or criminal penalties. Although the specific penalties are not detailed in this explanatory statement, it is known that breaches of the Customs Act 1901 can lead to significant fines and, in severe cases, imprisonment. The exact penalties depend on the nature and severity of the breach, as well as any relevant case law and statutory provisions.
Section 269S(1) of the Act specifies that a TCO is deemed to come into force on the day the application is lodged. This means that any rights or liabilities under the TCO are effective from that date, although it does not affect the rights of any person, except the Commonwealth, in respect of actions taken before the TCO's effective date. This ensures that the rights of importers are beneficially affected, particularly in terms of being able to apply for duty refunds on goods imported since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.
In conclusion, the legislation sets out a clear framework for the application and issuance of TCOs, with specific requirements and obligations for the CEO of Customs. It also ensures that any rights under the TCO are effectively managed from the date of application, without imposing any liabilities on individuals or entities other than the Commonwealth.