EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609978
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.
Halifax Vogel Group Pty Ltd applied for a TCO in respect of certain shade netting fabric on 06 June 2006.
Instrument
TCO No 0609978 was made on 18 August 2006. It declares that those certain shade netting 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. 0609978 is taken to have come into force on 06 June 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, as amended, includes provisions that allow for the creation of Tariff Concession Orders (TCO) to provide relief on certain goods imported into Australia. Enacted by the Australian Parliament, this legislation was introduced to address the need for a systematic approach to reduce customs duties on specific goods, thereby facilitating trade and supporting economic growth. The Tariff Concession Instrument No. 0609978, issued in 2006, exemplifies this approach by granting a tariff concession on certain shade netting fabric, reducing the general rate of duty from 10% to free. The policy objective is to ensure that such concessions are granted only when there are no substitutable goods produced in Australia, thereby protecting local industries while promoting the benefits of international trade.
Scope and Application
The Customs Act 1901, through Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs to apply lower rates of customs duty on specified goods. This Act applies to entities and individuals involved in the importation of goods, specifically those who apply for or are affected by TCOs. The scope of the Act includes any goods that are subject to a TCO, provided they do not fall under the exclusions listed in section 269SJ. The application of TCOs is national in reach, applying across all states and territories of Australia as it pertains to Commonwealth customs law. The Act also specifies that the application of a TCO does not affect the rights of any person except the Commonwealth, nor does it impose any liabilities on any person in relation to actions taken before the TCO's effective date. The TCO is effective from the date the application is lodged, and the CEO has the authority to issue these orders if certain criteria are met, as outlined in sections 269C and 269S of the Act. Subordinate instruments can extend or restrict the application of the Act as needed, ensuring flexibility in its enforcement and interpretation.
Key Provisions
The key sections of this legislation (Tariff Concession Instrument No. 0609978) are section 269C (269F) and section 269P(3) of the Customs Act 1901. Section 269C outlines the core criteria for a Tariff Concession Order (TCO) application, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, a written order (TCO) must be made. Instrument TCO No. 0609978 was issued on 18 August 2006, declaring that certain shade netting fabric is subject to a free rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved include the submission of a TCO application to the CEO by a person (section 269F). The CEO must assess whether the application meets the core criteria as outlined in section 269C and decide whether to make a TCO. If the CEO is satisfied that the application meets the core criteria, the CEO must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions. The Act also mandates that a TCO comes into force on the day the application is lodged (subsection 269S(1)), which was 06 June 2006 for TCO No. 0609978. Importantly, the Act ensures that the TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration 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 Act outlines specific offences and penalties for breaches of the legislation, although the Explanatory Statement does not detail these provisions for the TCO itself. However, under the Customs Act 1901, penalties for breaches can include fines and imprisonment. For example, section 234A of the Act provides for a penalty of up to five times the amount of duty or tax not paid, or in the case of serious or repeated breaches, a penalty of up to ten times the amount of duty or tax not paid, or imprisonment for up to five years, or both. In addition, section 235 of the Act allows for civil penalties for non-compliance with the Act, which can include fines of up to $22,200 for individuals and $111,000 for corporations. These penalties apply to breaches of the Customs Act 1901 as a whole and not specifically to the TCO, but they highlight the seriousness with which the Act treats non-compliance.