EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513215
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.
Eclipse Textiles applied for a TCO in respect of certain Knitted Fabric on 29 September 2005.
Instrument
TCO No 0513215 was made on 16 January 2006. It declares that those certain Knitted 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 10%. 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. 0513215 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for tariff concession orders (TCOs) which allow for the application of a lower rate of customs duty on specified goods. The Act was introduced to address the need for flexibility in tariff rates to support industry and trade, particularly in cases where substitutable goods are not produced domestically. This instrument, Tariff Concession Instrument No. 0513215, was made on 16 January 2006 in response to an application by Eclipse Textiles for certain Knitted Fabric, which were declared to be subject to a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods were produced in Australia. The tariff concession came into force on the date the application was lodged, 29 September 2005, without any submissions opposing the concession, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which apply lower rates of customs duty to specific goods. This legislation allows for applications from individuals or entities seeking a TCO for goods not listed in section 269SJ of the Act, which specifies goods ineligible for tariff concessions. If an application meets the core criteria outlined in section 269C, where no substitutable goods are produced in Australia, the CEO is mandated to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in the case of TCO No. 0513215. The TCO, once issued, applies retroactively to the date the application was lodged, as per subsection 269S(1) of the Act, ensuring that the rights of importers are beneficially affected without imposing any liabilities for actions prior to the TCO's effective date.
Key Provisions
The primary operative sections of the Customs Act 1901, as implemented by Tariff Concession Instrument No. 0513215, allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Specifically, section 269F of the Act permits an application to the CEO for a TCO in respect of certain goods, provided they do not fall under the exclusions listed in section 269SJ. If an application is deemed valid, the CEO is mandated under section 269C to make a TCO if it is determined that no substitutable goods are being produced in Australia as per section 269D and 269E, and the goods in question meet the criteria outlined in section 269P(3). This process is illustrated by the application and subsequent approval for Eclipse Textiles' certain Knitted Fabric, which now benefits from a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must ensure their application complies with the core criteria outlined in sections 269C, 269D, and 269E. The CEO, upon receiving a valid application, must follow the procedural requirements, including publishing a notice in the Gazette under subsection 269K(1) and considering any submissions received. The CEO must also decide whether to grant the TCO based on the absence of substitutable goods produced in Australia. Additionally, the Act mandates that the TCO's commencement date aligns with the date of the application under subsection 269S(1), ensuring that no person is disadvantaged by the retrospective application of the concession.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly detail offences or penalties for breaches directly related to the TCO process itself. However, any general contraventions of the Customs Act or the associated regulations could result in both civil and criminal penalties. Civil penalties may include fines up to a substantial amount, while criminal penalties could entail imprisonment depending on the severity and intent behind the breach. Importers and other affected parties must adhere to the conditions set forth in the TCO and comply with all relevant customs regulations to avoid these penalties.