EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516764
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.
Marfoam Agencies Pty Ltd applied for a TCO in respect of certain spunbonded polypropylene fabric on 08 December 2005.
Instrument
TCO No 0516764 was made on 03 March 2006. It declares that those certain spunbonded polypropylene 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 5%. 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. 0516764 is taken to have come into force on 08 December 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 by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition and collection of customs duties. A significant feature of the Act is the provision for Tariff Concession Orders (TCOs), which allow for the application of lower rates of customs duty on certain goods under specific conditions. Tariff Concession Instrument No. 0516764 was introduced to address the need for tariff concessions on certain spunbonded polypropylene fabrics, as applied for by Marfoam Agencies Pty Ltd. The instrument was enacted to facilitate the application of a free rate of duty on these goods, provided that no substitutable goods were produced in Australia at the time of the application. This legislative measure aims to support Australian businesses by potentially lowering the cost of importing specific materials, thereby promoting competitive market conditions and encouraging the use of imported goods where locally produced alternatives do not exist.
Scope and Application
The Customs Act 1901 applies to any individual or entity involved in the importation or exportation of goods into or out of Australia. The Act, specifically Part XVA, pertains to Tariff Concession Orders (TCOs) that can be applied for by any person, enabling them to request a lower rate of customs duty on specified goods. The Chief Executive Officer of Customs has the authority to make these orders, provided the goods do not fall under the prohibited categories outlined in section 269SJ of the Act and meet the core criteria as defined in section 269C. The TCOs apply to the whole of Australia, including its states, territories, and national jurisdiction. Any exclusions or exemptions are explicitly mentioned within the Act itself, particularly under section 269SJ, which lists goods that cannot be subject to a TCO. The scope of the Act can be extended or restricted through subordinate instruments, although these are not detailed in the explanatory statement. The TCOs do not affect existing rights or impose liabilities for actions taken prior to their implementation, but they do provide benefits such as duty refunds for importers as per the Customs Tariff Regulations.
Key Provisions
The primary operative sections of this legislation include section 269C, which sets out the core criteria that must be met for a Tariff Concession Order (TCO) to be granted, and section 269P(3), which requires the Chief Executive Officer of Customs (the CEO) to make a written order if the core criteria are met. Section 269F allows a person to apply to the CEO for a TCO in respect of certain goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions on a TCO application, and section 269S(1) stipulates that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application does not pertain to goods specified in section 269SJ. When a valid application is received, the CEO must evaluate whether the application meets the core criteria outlined in section 269C. If the application meets these criteria, the CEO must make a written TCO, as per section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, in accordance with section 269K(1). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted before the date of registration, as stated in the explanatory statement.
Breaching the provisions of this Act can result in various consequences. While the specific offences and penalties are not detailed in the text, it can be inferred that failure to comply with the requirements of the Act, such as submitting a valid application or making a TCO in accordance with the prescribed criteria, could result in administrative or legal consequences. Typically, such breaches may be subject to penalties, which could include fines or other sanctions as prescribed under the Customs Act 1901 or related regulations. The maximum penalties for such breaches would be determined by the relevant laws and regulations in place at the time of the offence.