EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512088
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 Polyester Scrim on 16 September 2005.
Instrument
TCO No 0512088 was made on 5 December 2005. It declares that those certain Polyester Scrim 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. 0512088 is taken to have come into force on 16 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 Customs Act 1901, enacted by the Commonwealth Parliament, facilitates the imposition of a lower rate of customs duty on certain goods through the creation of Tariff Concession Orders (TCOs). This legislation addresses the need to encourage imports by reducing the financial burden on businesses importing specific goods, thereby supporting trade and economic growth. The Tariff Concession Instrument No. 0512088, created under this Act, specifically aims to provide a zero percent duty rate on certain Polyester Scrim, as no substitutable goods were produced in Australia. This was made possible following an application by Kimberly Clark Australia Pty Ltd, which was accepted by the Chief Executive Officer of Customs, satisfying the core criteria set out in the Act. The policy objective here is to ensure that Australian businesses can access necessary goods at a reduced cost, promoting competitive pricing and market stability.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCOs) which can be applied for and granted by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The legislation applies to entities or individuals seeking to import goods that could potentially benefit from a tariff concession. Such entities or individuals must ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The geographic reach of this legislation is national, applying across the Commonwealth of Australia. Importantly, the Act does not disadvantage any person by affecting their rights as they stood on the day the TCO application was lodged, nor does it impose any liabilities on individuals or entities other than the Commonwealth. Exclusions from the TCOs are clearly outlined in section 269SJ, and the scope of application can be further refined or extended through subordinate instruments, such as the Customs Tariff Act 1995.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0512088 under the Customs Act 1901 (section 269P(3)) are concerned with the establishment of a Tariff Concession Order (TCO). This instrument specifically declares that certain Polyester Scrim goods are subject to a 0% customs duty rate instead of the general 5% duty rate, effective from the date the application for the TCO was lodged, which was 16 September 2005. The instrument was made on 5 December 2005, following an application by Kimberly Clark Australia Pty Ltd.
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269C of the Act stipulates that a TCO application is valid if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. For the purposes of this legislation, ‘substitutable goods’ are defined in section 269D as goods produced in Australia that could be used in the same way as the goods for which the TCO is being sought. Additionally, section 269K(1) mandates that once a TCO application is accepted as valid, the Chief Executive Officer of Customs (CEO) must publish a notice in the Gazette inviting submissions from any interested parties. In this case, no submissions were received.
Under the Customs Act 1901, there are specific consequences for non-compliance with the Act's provisions. While the explanatory statement does not detail specific offences, penalties, or consequences for breaching the Act, it is understood that any failure to comply with the requirements of a TCO could lead to civil or criminal penalties as prescribed by the Act. These could include fines or other sanctions as determined by the courts. The maximum penalties for breaches of customs regulations are detailed elsewhere in the Customs Act and may include substantial fines and imprisonment for serious offences.