EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513534
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 Fabric on 6 October 2005.
Instrument
TCO No 0513534 was made on 3 January 2006. It declares that those certain 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 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. 0513534 is taken to have come into force on 6 October 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, governs the importation and exportation of goods in Australia. The Act provides a framework for the application of customs duty and the administration of customs and excise. The Tariff Concession Instrument No. 0513534 was introduced to address the problem of ensuring that Australian consumers and businesses have access to a range of competitively priced goods, particularly those that are not produced domestically. By allowing the Chief Executive Officer of Customs to grant tariff concessions, the legislation aims to facilitate trade and enhance the competitiveness of Australian businesses. The Tariff Concession Instrument No. 0513534, made under section 269C of the Customs Act 1901, provides a mechanism for the reduction or exemption of customs duty on certain goods, subject to certain conditions being met, thereby supporting the policy objective of promoting fair and efficient trade practices.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on specified goods. This Act applies to any person or entity seeking to import goods that qualify for a tariff concession, as long as the goods do not fall under the prohibitions listed in section 269SJ. To qualify for a TCO, the applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. This is determined under sections 269C and 269D, where the definitions of "goods produced in Australia" and "ordinary course of business" are crucial. The CEO must also ensure that the application does not pertain to goods specified in section 269SJ, which lists items that cannot be subject to a TCO. The TCO applies to the specific goods declared under the order, with its commencement date being the day the application was lodged, as outlined in subsection 269S(1). This means that any duty benefits under the TCO will be effective from that date. Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before its registration, while potentially providing duty refund rights to importers of the specified goods from the effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0513534 (sections 269C, 269F, and 269P(3)) establish the criteria for making a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not those specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order declaring the goods to which the TCO applies. Section 269P(3) further mandates that if the CEO is satisfied the application meets these criteria, they must make a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
The Act imposes certain obligations on the CEO of Customs when processing a TCO application. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. This transparency mechanism ensures that all interested parties have an opportunity to provide input. The CEO must also ensure that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. If these conditions are met, the CEO is required to make the TCO as specified in section 269P(3).
Breaching the conditions or obligations outlined in the Customs Act 1901 could result in civil or criminal consequences. While the specific penalties for breaches are not detailed in the explanatory statement, the Act generally provides for significant penalties, including fines and imprisonment, for non-compliance with its provisions. The penalties may vary depending on the nature and severity of the breach. It is important for the CEO and applicants to adhere strictly to the statutory requirements to avoid any legal repercussions.
In summary, Tariff Concession Instrument No. 0513534 facilitates the reduction of customs duties on certain Fabric goods through a TCO, provided the application meets the criteria set out in the Customs Act 1901. The CEO has specific duties to process applications transparently and ensure compliance with the statutory requirements. Non-compliance with the Act could lead to severe civil or criminal penalties, emphasizing the importance of adhering to the legislative framework.