EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603702
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.
Eclipse Textiles Pty Ltd applied for a TCO in respect of certain knitted velvet fabric on 13 February 2006.
Instrument
TCO No 0603702 was made on 21 April 2006. It declares that those certain knitted velvet 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 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. 0603702 is taken to have come into force on 13 February 2006.
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 Parliament of Australia, includes provisions for Tariff Concession Orders (TCOs) to address the problem of promoting the import of goods that are not produced domestically and ensuring competitive pricing for consumers. The Act was amended to allow the CEO of Customs to reduce customs duty rates on certain imported goods, providing a legislative framework to support this process. The objective is to facilitate trade and enhance economic efficiency by avoiding unnecessary tariffs on goods that cannot be locally produced. Eclipse Textiles Pty Ltd's application for a TCO concerning certain knitted velvet fabric exemplifies this legislative intent, resulting in a zero duty rate for these goods from the date the application was lodged, thereby benefiting importers and potentially consumers.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO) for specific goods, thereby applying a lower rate of customs duty. This legislation applies to any person or entity that meets the core criteria for a TCO, particularly where the goods in question are not substitutable by goods produced in Australia in the ordinary course of business. The instrument extends across the Commonwealth of Australia and is designed to benefit importers by reducing their duty obligations on specified goods. Notably, the application of TCO No. 0603702, which was made on 21 April 2006, applies to certain knitted velvet fabric, providing a duty-free rate for these goods under item 50 of Schedule 4 to the Tariff. The CEO is mandated to publish notices in the Gazette to invite objections to TCO applications, although in this case, no objections were received. The TCO does not retroactively disadvantage any person and does not impose new liabilities, while providing importers the opportunity to apply for refunds of duties paid on these goods since the effective date of the TCO, which coincides with the date of application.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, involve the creation and management of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. Section 269C sets out the core criteria that the CEO must consider in determining whether the application meets the necessary requirements. If the CEO is satisfied that the application meets these criteria, they are required to make a written order, the TCO, specifying the goods and the applicable customs duty rate (section 269P(3)).
The obligations and requirements imposed by the Act on the parties it governs include the submission of a valid TCO application (section 269F) and the CEO's duty to review the application against the core criteria (section 269C). Additionally, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). Should no submissions be received, the CEO must proceed with the issuance of the TCO if the application meets the core criteria.
In terms of offences, penalties, or consequences, the Act does not explicitly outline specific sanctions for breaches directly related to the TCO process. However, any actions taken in contravention of the Customs Act 1901, including improper applications or misuse of TCOs, could result in legal consequences under other sections of the Act. For instance, false statements or misleading information provided in an application could lead to criminal charges under sections related to fraud or providing false information to a Commonwealth officer. Furthermore, while the Act itself does not specify maximum penalties, general provisions under the Crimes Act 1914 could apply, potentially leading to substantial fines and imprisonment.