EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513214
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.
Hennessy Corporation Pty Ltd T/A Eclipse Textiles applied for a TCO in respect of certain knitted fabric on 29 September 2005.
Instrument
TCO No 0513214 was made on 16 December 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.0513214 is taken to have come into force on 29 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. 0513214 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions on specific goods. This legislation allows the Chief Executive Officer of Customs to reduce or eliminate customs duties on certain goods if it is determined that no substitutable goods are produced in Australia. The objective is to encourage the import of goods that are not domestically produced, thereby potentially lowering costs for consumers and businesses that rely on these imports. The Tariff Concession Order (TCO) in question was made to provide tariff concessions on certain knitted fabrics, reducing the duty from 7.5% to free, effective from the date the application was lodged. This legislative measure ensures that the rights of importers are protected and that no existing rights or liabilities are adversely affected by the concession.
Scope and Application
The Tariff Concession Instrument No. 0513214 under the Customs Act 1901 applies to any person or entity seeking a tariff concession order (TCO) for certain goods that are imported into Australia and subject to customs duty. The scope of this Act is specifically directed at providing relief from the standard customs duty for particular goods, provided that no substitutable goods are produced in Australia. The concession applies to the goods specified in the instrument, which in this instance are certain knitted fabrics. The TCO is applicable across the Commonwealth of Australia and its implementation is managed by the Chief Executive Officer of Customs, who has the authority to make such orders under section 269F of the Act. The application of this legislation is limited by section 269SJ, which excludes certain goods from being subject to a TCO. The process for establishing a TCO involves a rigorous assessment to ensure the application meets the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. Any subordinate instruments that further detail the application and enforcement of this Act are to be determined by the CEO and are subject to the overarching provisions of the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0513214 (Section 269P(3)) detail that a Tariff Concession Order (TCO) applies to certain knitted fabrics, specifying that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 7.5%. This order was made effective from 29 September 2005, the date on which Hennessy Corporation Pty Ltd T/A Eclipse Textiles lodged their application for a TCO (Section 269S(1)). The instrument declares that these specific knitted fabrics are eligible for tariff concessions due to the absence of substitutable goods produced in Australia at the time of application (Section 269C).
The obligations imposed by this Act on the parties involved primarily include the requirement for the Chief Executive Officer of Customs (CEO) to consider applications for TCOs under Section 269F, ensuring that they meet the core criteria set out in Section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO, as per Section 269K(1). The CEO in this instance did not receive any submissions in response to the published notice.
In terms of offences and penalties, the Customs Act 1901 does not explicitly outline specific criminal or civil penalties for breaches related to TCO applications or the issuance of TCOs. However, general provisions within the Act concerning customs duty evasion or incorrect declarations could apply. For example, under Section 231 of the Customs Act, persons who provide false or misleading information to obtain a tariff concession could face substantial penalties. The maximum penalties for such offences can include fines of up to $22,000 and/or imprisonment for up to two years for individuals, and higher penalties for corporate entities. Furthermore, the Act includes provisions for the recovery of any overpaid duties and interest on such overpayments.