EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603901
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.
Kimberley Clark Australia Pty Ltd applied for a TCO in respect of certain fabric on 16 February 2006.
Instrument
TCO No 0603901 was made on 21 April 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. 0603901 is taken to have come into force on 16 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, provides a framework for the regulation of customs duties. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). The aim of this scheme is to facilitate tariff reductions on goods that meet certain criteria, thereby addressing the gap in providing concessions where no substitutable goods are produced in Australia. The instrument, Tariff Concession Instrument No. 0603901, was introduced following an application by Kimberley Clark Australia Pty Ltd for a TCO on certain fabric. The CEO was satisfied that no substitutable goods were produced in Australia and thus made the order, effective from 16 February 2006, reducing the duty rate from 5% to 0% on the specified fabric. The policy objective is to encourage the importation of goods where local production does not occur, potentially benefiting importers and stimulating market competition.
Scope and Application
The Tariff Concession Instrument No. 0603901 under the Customs Act 1901 applies specifically to certain fabric goods, as designated by Kimberley Clark Australia Pty Ltd in an application lodged on 16 February 2006. The instrument is targeted at reducing the customs duty on these goods from the general rate of 5% to 0%, contingent on the condition that no substitutable goods are produced in Australia. This application was processed by the Chief Executive Officer of Customs who, upon satisfaction that the application met the core criteria under section 269C of the Act, issued the Tariff Concession Order (TCO). This order, effective from the date of the application, allows for a reduction in duty rates for the specified goods while ensuring that no pre-existing rights or liabilities of any person, other than the Commonwealth, are adversely affected. The instrument operates within the Commonwealth jurisdiction, with its application and enforcement falling under the purview of the Customs Act 1901. The TCO does not extend to goods that are specified as ineligible under section 269SJ of the Act, thereby maintaining certain exclusions within the legislative framework.
Key Provisions
The Tariff Concession Order No. 0603901 (TCO No. 0603901) under the Customs Act 1901 (section 269C) establishes that certain fabric will be subject to a concessionary rate of customs duty. Specifically, this order declares that the fabric in question will be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of 0% (section 269P(3)). This order was made following an application by Kimberley Clark Australia Pty Ltd on 16 February 2006, and came into force on the same date (section 269S(1)).
The obligations imposed by the Customs Act 1901 on the Chief Executive Officer of Customs (CEO) include the requirement to assess whether an application for a Tariff Concession Order (TCO) meets the core criteria. If the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business, they must make a written TCO (section 269C). The CEO must also publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission. In this case, no submissions were received (subsection 269K(1)).
Breaching the provisions of the Customs Act 1901 can lead to various civil or criminal consequences. For instance, under section 238, the CEO can impose a penalty of up to $10,500 for providing false or misleading information in a TCO application. Furthermore, under section 241, a person who knowingly imports goods that do not meet the requirements of a TCO can be liable for a penalty of up to $12,600. These penalties reflect the seriousness of non-compliance with the Act’s provisions.
The Tariff Concession Order No. 0603901 ensures that the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the date of registration. The Act is designed to facilitate trade while maintaining compliance and accountability through its defined obligations and penalties.