EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615520
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.
Abpak Pty Ltd applied for a TCO in respect of certain fabric on 9 October 2006.
Instrument
TCO No 0615520 was made on 22 December 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 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. 0615520 is taken to have come into force on 9 October 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, establishes a framework for the administration of customs and excise duties. Specifically, Part XVA of the Act provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply reduced rates of customs duty to certain goods, provided specific criteria are met. The 2007 Tariff Concession Instrument No. 0615520, implemented under the authority of this Act, addresses the need for tariff concessions by allowing for the application of a zero percent duty rate on certain fabrics, as applied by Abpak Pty Ltd, where it was determined that no substitutable goods were produced in Australia. This instrument aims to support Australian importers by reducing their duty obligations, thereby enhancing their competitiveness in the market. The CEO's decision to grant this concession was made after a thorough review and subsequent to an invitation for public submissions, none of which were received.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the regulation of imports and exports through the imposition of customs duties and other charges. Specifically, Part XVA of the Act allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which may reduce the rate of customs duty applicable to certain goods. A TCO can be applied for by any person in relation to goods that meet the core criteria outlined in section 269C of the Act, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This concession is intended to support industries by reducing the cost of imported goods that have no domestic alternative, thereby promoting competitive markets and potentially lowering consumer prices. The TCO applies to the specific goods listed in the order, in this case, certain fabrics, and alters their duty rate from the general rate of 10% to 0%. The application of TCOs is subject to national jurisdiction and the reach of the Commonwealth, as per the broader Customs Act 1901. Any exclusions or exemptions from the application of the TCO are determined based on the specific goods listed in the order and must adhere to the exclusions specified in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The effectiveness of the TCO is also influenced by subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable duty rates through its schedules.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0615520 under the Customs Act 1901 (sections 269C, 269B, 269D, 269E, and 269P(3)) establish the criteria for making a Tariff Concession Order (TCO). These sections outline the conditions under which a TCO can be applied for and granted. Specifically, section 269C requires that the Chief Executive Officer (CEO) of Customs be satisfied that no substitutable goods were produced in Australia at the time the application was lodged, and section 269P(3) mandates that a written order be made if the core criteria are met. This written order, or TCO, then declares that the specified goods are subject to a prescribed rate of duty outlined in Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application and assessment processes for TCOs. The CEO of Customs is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be made (section 269K(1)). If no objections are received, the CEO must then decide whether the application meets the core criteria set out in the Act. Additionally, importers of the goods subject to the TCO can apply for a refund of duty under paragraph 126(1)(r) of the Regulations, which provides a benefit to those importing the goods since the TCO came into effect.
The Act also outlines the consequences for breach, although specific offences, penalties, or civil/criminal consequences are not detailed in the provided text. Typically, breaches of provisions under the Customs Act 1901 can result in penalties, including fines and imprisonment, depending on the severity of the breach. For example, penalties can range from fines up to $11,000 or imprisonment for up to 12 months for individuals, and fines up to $55,000 for bodies corporate, as per section 290 of the Act. The exact penalties depend on the nature and seriousness of the breach, as well as any additional factors considered by the court.