EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513345
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 chiffon fabric on 29 September 2005.
Instrument
TCO No 0513345 was made on 16 December 2005. It declares that those certain chiffon 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.0513345 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 was enacted to regulate the import and export of goods in Australia, including the imposition of customs duties on imported goods. One of its components, the Tariff Concession Instrument No. 0513345, was introduced to address the need for tariff concessions on specific goods, enabling the application of a lower rate of customs duty on those goods. This instrument was developed in response to applications by businesses, such as Hennessy Corporation Pty Ltd T/A Eclipse Textiles, seeking relief from the standard customs duties on particular imports. The instrument was enacted by the relevant legislature, ensuring that the application process aligns with the provisions of the Customs Act 1901. The policy objective behind this specific Tariff Concession Order was to provide tariff relief on certain chiffon fabrics, thereby facilitating the import of these goods at a reduced duty rate, ultimately benefiting importers and potentially stimulating economic activity related to these products.
Scope and Application
The Customs Act 1901, under its Part XVA, governs the process by which Tariff Concession Orders (TCOs) can be established by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specified goods. The Act applies to any person or entity seeking to import goods that are eligible for a tariff concession, provided that the goods do not fall under the restricted list outlined in section 269SJ. The application for a TCO must meet the core criteria set out in section 269C, which involves ensuring that no substitutable goods are produced in Australia at the time of the application. The geographic reach of this Act is national, as it operates under the Commonwealth jurisdiction, and it applies to all states and territories within Australia. Subordinate instruments can extend or further specify the application of the Act, but no exclusions, exemptions, or thresholds are explicitly mentioned in the provided text. The commencement of a TCO is effective from the date the application is lodged, as specified by subsection 269S(1), and does not retroactively disadvantage or impose liabilities on any person other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically within Part XVA, outlines the framework for Tariff Concession Orders (TCOs), which can be applied for by individuals or entities seeking a lower customs duty rate for certain goods. A person may apply to the Chief Executive Officer (CEO) of Customs for a TCO under section 269F (1). If the application is not for goods specified in section 269SJ, which are ineligible for TCOs, the CEO must then assess whether the application meets the core criteria as stipulated in section 269C. For an application to meet these criteria, it must be the case that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of these terms are provided in sections 269D, 269E and 269F of the Act.
Upon satisfying themselves that an application meets the core criteria, the CEO is required by subsection 269P(3) of the Act to issue a written order, which is the TCO. This order specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In the case of TCO No. 0513345, the CEO declared that certain chiffon fabrics are subject to item 50 of Schedule 4, with a general duty rate of 10% reduced to free under the TCO. The TCO, as per subsection 269S(1), is taken to have come into force on the day the application was lodged, in this instance on 29 September 2005. This date marks the commencement of the TCO, and while it does not affect any pre-existing rights of persons, it does allow for importers to apply for duty refunds for imports made since this date, as per paragraph 126(1)(r) of the Regulations.
The obligations imposed by the Act on the CEO include the assessment of TCO applications against the core criteria and the publication of a notice in the Gazette inviting submissions from any person who may have grounds for opposing the TCO. In the case of TCO No. 0513345, no such submissions were received. The Act also stipulates that the TCO does not impose any liabilities on any person, other than the Commonwealth. However, it does beneficially affect the rights of importers, allowing them to seek refunds for duties paid on imports of the specified goods since the TCO came into force.
Under the Customs Act 1901, there are no specific offences or penalties outlined for breaches of the provisions relating to TCOs. However, any breach of the Customs Act or the associated regulations could potentially lead to civil or criminal penalties, depending on the nature and severity of the breach. The maximum penalties for breaches of the Customs Act can vary widely and are determined by the specific provisions of the Act or regulations that are contravened, which may include fines or imprisonment, or both. It is essential for parties subject to the Act to comply with its provisions to avoid any potential legal repercussions.