EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611942
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.
Nordale Australia Pty Ltd applied for a TCO in respect of certain woven fabric on 17 July 2006.
Instrument
TCO No 0611942 was made on 13 October 2006. It declares that those certain woven 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 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. 0611942 is taken to have come into force on 17 July 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 through which Tariff Concession Orders (TCOs) can be issued to lower the customs duty on certain goods. This is achieved through section 269F of the Act, which allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO on goods that meet specific criteria, as outlined in sections 269C, 269B, and 269D of the Act. The problem this legislation seeks to address is the potential for higher tariffs on goods for which no domestic substitute exists, thereby protecting Australian industries from unfair competition while also potentially benefiting consumers through lower prices. The policy objective, as stated in the explanatory statement, is to ensure that a TCO application is only made when no substitutable goods are produced in Australia, which is a core criterion established under section 269C of the Act.
Scope and Application
The Tariff Concession Instrument No. 0611942 under the Customs Act 1901 applies specifically to certain woven fabric imported into Australia, as declared in the instrument. The Act allows for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO), made by the Chief Executive Officer of Customs (CEO) in accordance with the criteria set out in the Act. The CEO must be satisfied that the application for a TCO pertains to goods not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, and that the application meets the core criteria outlined in sections 269C and 269D of the Act. Once these criteria are met, the CEO issues a written TCO that specifies the goods to which a particular item in Schedule 4 to the Customs Tariff Act 1995 applies. The TCO, which is retroactive to the date of application, does not affect any existing rights or impose liabilities on individuals or entities other than the Commonwealth. The concession applies nationally, as it pertains to the importation of goods into Australia and is subject to the Customs Act, which has a Commonwealth jurisdiction.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0611942, which is based on the Customs Act 1901, include sections 269C, 269P, and 269SJ. Section 269C of the Act establishes the criteria that a Tariff Concession Order (TCO) application must meet, 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 these criteria, they must issue a written order. Section 269SJ, meanwhile, specifies the types of goods that are ineligible for a TCO.
Under this legislation, the CEO has a clear set of obligations and requirements to follow when processing a TCO application. The CEO must first verify that the application is valid and not for goods listed in section 269SJ. If the application is deemed valid, the CEO must then determine whether it meets the core criteria outlined in section 269C. If satisfied, the CEO must make a written TCO. Furthermore, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to lodge submissions if they believe the TCO should not be made.
In terms of penalties and consequences, the Act does not explicitly detail specific offences or penalties for non-compliance with the TCO provisions. However, it is implied that any failure to adhere to the statutory requirements could lead to legal challenges or administrative penalties. The instrument itself is designed to ensure that no person, other than the Commonwealth, is disadvantaged by its provisions. It also does not impose any new liabilities on persons other than the Commonwealth in respect of actions taken before the TCO's registration. Instead, it provides potential benefits, such as the ability for importers to apply for a refund of duty on goods imported since the TCO's effective date.