EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608185
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.
Gale Pacific applied for a TCO in respect of certain raschell knit polyethylene fabric on 11 May 2006.
Instrument
TCO No 0608185 was made on 04 August 2006. It declares that those certain raschell knit polyethylene 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 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. 0608185 is taken to have come into force on 11 May 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 Australian Parliament, provides a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to apply a lower rate of customs duty on certain goods. The 2006 Explanatory Statement for Tariff Concession Instrument No. 0608185, which relates to certain raschell knit polyethylene fabrics, highlights the process by which these concessions are granted. The primary objective is to reduce customs duty for goods where no substitutable products are produced in Australia, thus encouraging the importation of such goods. The explanatory statement outlines the application process, the criteria for approving TCOs, and the commencement date of the concession, which is backdated to the application date, thereby protecting the rights of importers and ensuring they can apply for duty refunds for imports made since the concession was effectively in place.
Scope and Application
The Tariff Concession Instrument No. 0608185, under Part XVA of the Customs Act 1901, applies to entities or individuals seeking tariff concessions on specified goods. This Act is applicable across the Commonwealth of Australia and pertains to the concession of customs duties on goods that are subject to a Tariff Concession Order (TCO). The legislation is triggered when an application is made to the Chief Executive Officer of Customs for a TCO regarding particular goods, provided those goods are not specified in section 269SJ of the Act which excludes certain goods from TCO eligibility. The process hinges on the core criteria set out in sections 269C, 269D, 269E, and 269F of the Act, particularly whether substitutable goods are produced in Australia in the ordinary course of business. Should the CEO determine that no such substitutable goods are produced in Australia, a TCO may be issued, as was the case with Gale Pacific’s application for raschell knit polyethylene fabric on 11 May 2006, which became effective on that date. The instrument extends to provide a zero rate of duty on these specified goods, whereas the general rate would have been 10%. The Act also ensures that the rights of non-Commonwealth persons are not adversely affected by the issuance of a TCO.
Key Provisions
The Tariff Concession Instrument No. 0608185, made under section 269F of the Customs Act 1901 (the Act), pertains to the application of tariff concessions for certain raschell knit polyethylene fabrics. Specifically, this instrument was created to lower the customs duty on these fabrics, which is now set at zero percent instead of the general rate of 10% (section 269P(3)). To qualify for this concession, the Chief Executive Officer of Customs (the CEO) must determine that no substitutable goods are produced in Australia, meaning that no domestic product can serve the same purpose as the imported fabrics (section 269C, 269D, 269E, and 269J).
This legislation imposes certain obligations on the CEO of Customs, primarily ensuring that the application for a Tariff Concession Order (TCO) adheres to the core criteria set forth in the Act. The CEO must verify that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for a TCO. Additionally, the CEO is mandated to publish a notice in the Gazette inviting public submissions on the application, although no submissions were received for this particular TCO (subsection 269K(1)). The CEO must also ensure that the TCO does not adversely affect any person's rights as of the registration date or impose liabilities for actions taken before the TCO's effective date (subsection 269S(1)).
Non-compliance with the provisions of the Customs Act 1901 could result in various civil or criminal consequences. While the specific penalties are not detailed in this explanatory statement, breaches of the Act could lead to penalties as outlined in the relevant sections of the Act. Importers who do not adhere to the terms of the TCO might face financial penalties or other sanctions. It is important to note that any penalties would depend on the specific nature of the breach and the provisions of the Act governing such infractions.