EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513216
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 velvet knitted fabric on 29 September 2005.
Instrument
TCO No 0513216 was made on 16 December 2005. It declares that those certain velvet 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 10%. 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.0513216 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 Parliament of Australia, established a framework for managing customs duties and associated tariffs on goods imported into Australia. This Act allows for the creation of Tariff Concession Orders (TCOs), which provide for reduced or waived customs duties on specific goods. The Customs Act 1901 aims to facilitate trade and ensure that Australian businesses have access to necessary goods without undue financial burden, thereby promoting economic growth and efficiency. The Tariff Concession Instrument No. 0513216, introduced under this Act, was enacted to address the specific need of Hennessy Corporation Pty Ltd T/A Eclipse Textiles to reduce the customs duty on certain velvet knitted fabrics. By satisfying the core criteria, the Chief Executive Officer of Customs was able to declare these fabrics as eligible for a concession, setting their duty rate to free from the general rate of 10%. This instrument reflects the policy objective of the Customs Act 1901 to support the efficient operation of trade by providing targeted tariff concessions.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0513216, provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on specific goods. This legislation applies to any person or entity seeking to import goods that may benefit from a tariff concession, provided that the goods do not fall under the restricted categories specified in section 269SJ of the Act. The instrument has a nationwide jurisdictional reach across Australia and does not impose any exclusions or exemptions beyond those outlined in the Act. The application of the TCO is contingent on the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The instrument does not extend or restrict its application beyond the scope set out in the Act but allows for further detail to be specified in subordinate instruments.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C outlines the core criteria that an application must meet, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the application meets the core criteria, the CEO must make a written order declaring that the goods are subject to the concession. Section 269S specifies the effective date of the TCO, which is the day the application was lodged.
The Customs Act imposes certain obligations on applicants for TCOs. The CEO must decide whether an application meets the core criteria outlined in section 269C. The applicant must provide sufficient evidence to satisfy the CEO that no substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as per subsection 269K(1). The CEO must consider any submissions received and make a decision based on the information provided.
There are no specific offences or penalties outlined in the explanatory statement for failure to comply with the requirements of the TCO process. However, the Customs Act 1901 and associated regulations provide for a range of penalties for breaches of customs laws. For example, knowingly or recklessly making a false statement or representation in an application can result in a civil penalty of up to $22,200 for a corporation and fines up to $4,440 for individuals, as well as potential criminal penalties. Similarly, failure to comply with the terms of the TCO may result in the imposition of customs duties and penalties, as well as potential legal action by the Commonwealth.
The Tariff Concession Instrument No. 0513216 provides specific tariff concessions for certain velvet knitted fabrics. The instrument declares that these goods are subject to a concession, reducing the duty from the general rate of 10% to free. Importers of these goods will be able to apply for a refund of duty paid on goods imported since the TCO is taken to have come into force on 29 September 2005. The TCO does not impose any liabilities on any person and does not affect the rights of a person other than the Commonwealth.