EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514901
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 Wet Crepe Towelling on 26 October 2005.
Instrument
TCO No 0514901 was made on 16 January 2006. It declares that those certain Wet Crepe Towelling 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. 0514901 is taken to have come into force on 26 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 Tariff Concession Instrument No. 0514901 was enacted in 2006 under the Customs Act 1901 with the purpose of providing tariff concessions on certain goods, specifically certain Wet Crepe Towelling, as applied by Kimberly-Clark Australia Pty Ltd. This instrument was introduced to address the need for a reduction in customs duty rates for goods that are not being produced domestically, thereby promoting imports and potentially reducing consumer prices. The instrument was developed by the Chief Executive Officer of Customs and was made pursuant to section 269F of the Act, which allows for the application of tariff concession orders. The policy objective was to ensure that the goods in question were not substitutable by any domestically produced goods, as per section 269C of the Act, thus qualifying them for a tariff concession.
The instrument was subject to a process of public consultation as required by subsection 269K(1) of the Act, though no submissions were received in response to the published notice. The tariff concession came into effect on the date the application was lodged, 26 October 2005, and does not impose any liabilities on any person, including the rights of importers who can apply for a refund of duty on goods imported since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0514901, established under the Customs Act 1901, applies specifically to goods that are the subject of a Tariff Concession Order (TCO), in this case, certain Wet Crepe Towelling. The Act facilitates the application process for tariff concessions by individuals or entities seeking lower rates of customs duty for specified goods. This legislation is pertinent to importers and exporters of the designated goods, as well as to the Chief Executive Officer of Customs who is responsible for evaluating and issuing TCOs. The scope of this Act extends across the Commonwealth of Australia, impacting trade practices and import duties on the goods specified within the TCO. However, the Act explicitly excludes certain goods as outlined in section 269SJ from eligibility for a TCO. The Act also allows for the extension and restriction of its application through subordinate instruments, ensuring flexibility in its implementation and enforcement.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0514901, focus on the establishment of Tariff Concession Orders (TCOs) for specific goods. Section 269C outlines the core criteria for a TCO application to be approved. This requires that on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, a written order, or TCO, must be made declaring that the goods in question are subject to a specified rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)). In this case, certain Wet Crepe Towelling, as specified in the instrument, will have a duty rate of 0% under item 50 of Schedule 4.
The Act imposes specific obligations and requirements on both the applicant and the CEO. The applicant must ensure that their application meets the core criteria, specifically that no substitutable goods are being produced in Australia at the time of application. The CEO, on the other hand, has the duty to assess the application against these criteria and, if satisfied, to issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO. In this case, the CEO published the notice but did not receive any submissions opposing the TCO for certain Wet Crepe Towelling (s 269K(1)).
The Act also delineates potential consequences for non-compliance. However, the explanatory statement does not explicitly mention any specific offences, penalties, or consequences for breaching the terms of the TCO. Nevertheless, it is important to note that the Act generally provides for various penalties for breaches of customs regulations, which could include fines or imprisonment. The specific penalties would depend on the nature and severity of the breach. The TCO itself does not impose any liabilities on any person but allows for the rights of importers to be beneficially affected, including the ability to apply for a refund of duty on goods imported since the TCO came into force (s 126(1)(r) of the Regulations).