EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516765
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 0516765 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. 0516765 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 Tariff Concession Instrument No. 0516765 was enacted in 2006 as an instrument under the Customs Act 1901, aiming to provide tariff concessions for certain goods. The instrument was introduced to address the need for facilitating the import of specific goods by reducing their customs duty rates. The Customs Act 1901, enacted by the Parliament of Australia, allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for goods that are not produced in Australia and do not have substitutable goods produced domestically. The policy objective behind this legislation is to support the import of goods that cannot be locally produced, thereby benefiting importers and potentially aiding in economic activities that rely on such imports.
The instrument specifically addresses an application by Marfoam Agencies Pty Ltd for tariff concessions on certain spunbonded polypropylene fabrics. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, and hence, a TCO was issued making these fabrics tariff-free. The instrument came into effect on the date the application was lodged, 08 December 2005, without affecting any pre-existing rights or imposing new liabilities. This legislative action exemplifies the legislative intent to streamline import processes for non-domestically produced goods, ensuring that such concessions do not disadvantage existing stakeholders.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides for the creation of Tariff Concession Orders (TCOs) which apply to particular goods, granting them a lower rate of customs duty. This Act applies to any person or entity that seeks to import goods that are eligible for a TCO, and it is administered by the Chief Executive Officer of Customs. The scope of the Act is national, applying across the Commonwealth of Australia, and it does not distinguish between states or territories. The Act allows for the exclusion of certain goods from TCO consideration as specified in section 269SJ. The process for obtaining a TCO involves an application to the CEO, who must determine if the application meets the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. Once a TCO is made, it applies to goods specified in the order, which in this case includes certain spunbonded polypropylene fabrics, and the TCO does not affect existing rights or impose new liabilities on persons other than the Commonwealth. The TCO in question, TCO No. 0516765, came into force on the date of the application, 08 December 2005, and provides a free rate of duty for the specified goods.
Key Provisions
The Tariff Concession Instrument No. 0516765 under the Customs Act 1901 introduces a Tariff Concession Order (TCO) that applies to certain spunbonded polypropylene fabrics (section 269P(3)). This instrument, made by the Chief Executive Officer of Customs (CEO), specifies that the general rate of duty on these fabrics is reduced to free, as opposed to the usual 5% (section 269P(3)). To qualify for this concession, the CEO must be satisfied that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The term "substitutable goods" refers to those produced in Australia that can be used in the same way as the goods in question, including design uses (section 269D, 269E).
The obligations imposed by this Act on the relevant parties, including the CEO, Marfoam Agencies Pty Ltd, and other importers, include the submission of a valid TCO application (section 269F). Once an application is accepted, the CEO must publish a notice in the Gazette inviting any person who may have objections to lodge submissions (subsection 269K(1)). In this case, the CEO did not receive any submissions. The TCO applies from the date the application was lodged (subsection 269S(1)), which in this instance is 08 December 2005. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
For breach of any provisions in this legislation, the Act does not specify particular offences, penalties, or consequences. However, general legal consequences may apply for non-compliance with customs regulations. The Act ensures that the TCO does not affect the rights of a person as at the date of registration, so as to disadvantage that person or impose liabilities in respect of anything done or omitted before the registration date (subsection 269S(2)). Therefore, no liabilities are imposed on any person under this TCO.