EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617971
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.
3M Australia Pty Ltd applied for a TCO in respect of certain hook landing zone fabrics on 26 October 2006.
Instrument
TCO No 0617971 was made on 12 January 2007. It declares that those certain hook landing zone 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 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. 0617971 is taken to have come into force on 26 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, was introduced to regulate the importation and exportation of goods and to ensure the efficient collection of duties and taxes. The Act provides a framework for the administration of customs and excise, including the power to make Tariff Concession Orders (TCOs). The 2007 Tariff Concession Instrument No. 0617971 under this Act addresses the specific problem of ensuring that certain imported goods, such as particular hook landing zone fabrics, are subject to preferential tariff rates when no suitable Australian-produced alternatives exist. This instrument was made to provide relief from customs duty for these specified fabrics, reducing the duty from the general rate of 5% to a rate of free, thereby facilitating trade and supporting industries that rely on these specific imported materials. The instrument's policy objective is to support Australian industries by ensuring that they have access to necessary imported goods without incurring prohibitive customs duties, while also preventing the local production of these goods, which would be economically inefficient.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced customs duties on specified goods. The Act applies to individuals and entities that seek to import goods that are eligible for tariff concessions, provided the goods do not fall under the exclusions listed in section 269SJ. The legislation operates nationally, as it is a Commonwealth Act. A TCO becomes effective on the date the application is lodged, and the application process requires publication in the Gazette with an invitation for submissions, although no submissions are required to proceed. The Act mandates that a TCO application must meet core criteria, specifically that no substitutable goods are produced in Australia at the time of application. Once granted, a TCO provides tariff relief on specified goods, as seen in TCO No. 0617971 for certain hook landing zone fabrics, which now attract a duty rate of free instead of the general 5%. The Act also ensures that the implementation of a TCO does not adversely affect the rights of persons other than the Commonwealth or impose new liabilities on them.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0617971, establish the framework for tariff concessions under the Customs Act 1901 (sections 269C and 269P(3)). These sections allow the Chief Executive Officer of Customs (CEO) to grant a tariff concession order (TCO) for specific goods if certain conditions are met. Notably, section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Section 269P(3) requires the CEO to make a written order if satisfied that the application meets these criteria, declaring the goods subject to a prescribed tariff item in Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties it governs include the submission of a TCO application by a person to the CEO (section 269F). The CEO must then determine if the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds to issue the TCO. The CEO must also ensure that the TCO does not affect the rights of any person adversely and does not impose any liabilities in respect of actions taken before the TCO's registration date.
Offences, penalties, or consequences for breaches of this legislation are not explicitly detailed within the text of the explanatory statement. However, the Customs Act 1901 and associated regulations likely contain provisions that address breaches of tariff concession orders. Typically, breaches of customs legislation can result in civil or criminal penalties, including fines and potential imprisonment. The exact penalties would depend on the specific breach and the relevant sections of the Customs Act and associated regulations.