EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617441
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.
Baldwin Graphic Equipment applied for a TCO in respect of certain polyester and woodpulp cleaning cloths on 21 September 2006.
Instrument
TCO No 0617441 was made on 08 December 2006. It declares that those certain polyester and woodpulp cleaning cloths 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 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. 0617441 is taken to have come into force on 21 September 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 was enacted to regulate the import and export of goods in Australia, among other things. It established a framework for the imposition of customs duty on imported goods and allows for tariff concessions to be applied under certain conditions. The Tariff Concession Instrument No. 0617441 was introduced to address the specific issue of Baldwin Graphic Equipment seeking a tariff concession order (TCO) for certain polyester and woodpulp cleaning cloths. The instrument was enacted by the Chief Executive Officer of Customs in accordance with the provisions of the Customs Act 1901. The policy objective of this instrument is to provide tariff relief to importers of goods that are not produced domestically, thereby promoting competition and supporting the domestic industry where applicable.
Scope and Application
The Tariff Concession Instrument No. 0617441 under the Customs Act 1901 applies to entities or individuals seeking to import specific goods into Australia, namely polyester and woodpulp cleaning cloths, by providing them with a lower rate of customs duty. The instrument pertains to transactions involving the importation of these goods and is effective from the date the application was lodged, which is 21 September 2006. This instrument is applicable nationwide across Australia and is subject to the conditions outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The application process for such tariff concessions is managed by the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, including the absence of substitutable goods produced in Australia. The instrument does not disadvantage any person other than the Commonwealth and does not impose liabilities on any individual or entity. Any person who believes there are reasons why the tariff concession should not be made can lodge a submission, although in this case, no such submissions were received. The scope of this Act is further defined and potentially extended through subordinate instruments, as specified in the relevant sections of the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0617441 under the Customs Act 1901 are centred around the application and approval of a Tariff Concession Order (TCO). The instrument declares that certain polyester and woodpulp cleaning cloths are eligible for tariff concessions, thereby attracting a rate of duty of free instead of the general rate of 5% (sections 269C, 269F, 269P(3)). This concession is contingent upon the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods are produced in Australia (section 269C). The instrument specifies that the TCO came into effect on the date the application was lodged, 21 September 2006 (subsection 269S(1)).
Under this Act, the CEO has the obligation to ensure that applications for TCOs are assessed against the core criteria outlined in section 269C, particularly that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). In this instance, the CEO did not receive any submissions, which likely facilitated a swift approval process. Furthermore, the CEO is mandated to make a written TCO if the application meets the criteria (section 269P(3)).
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in various consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of the Customs Act generally may incur civil or criminal penalties, including fines and imprisonment. The exact penalties depend on the nature and severity of the breach, with potential penalties varying significantly under Australian law. The Act’s framework ensures that any non-compliance is subject to enforcement actions, thereby maintaining the integrity of the tariff concession scheme.