EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617973
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 fastening tapes on 26 October 2006.
Instrument
TCO No 0617973 was made on 12 January 2007. It declares that those certain fastening tapes 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. 0617973 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, establishes a framework for the administration of customs and excise duties, including the provision for Tariff Concession Orders (TCOs). This Act was updated to address the need for a streamlined process for reducing or eliminating customs duties on specific goods, thereby encouraging trade and industry development. The Tariff Concession Instrument No. 0617973, made under this Act, specifically targets certain fastening tapes by granting a concession that reduces the general duty rate of 5% to zero. This was achieved after a thorough review confirmed that no suitable Australian-made alternatives existed, aligning with the policy objective of supporting industries that rely on imported materials. The legislative process involved public consultation, ensuring transparency and stakeholder engagement, before the concession was formally recognised on the date the application was lodged, 26 October 2006.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, who applies a lower rate of customs duty to goods specified in these orders. An application for a TCO can be made by any person, provided the goods do not fall under the exclusions specified in section 269SJ of the Act. The core criteria for a TCO, as outlined in sections 269C, 269B, and 269D, require that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. If these criteria are met, the CEO must make a written TCO. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and its customs regulations. The application of this Act can be extended or restricted through subordinate instruments, which may include specific regulations regarding the types of goods eligible for tariff concessions and the conditions under which these concessions can be applied. The TCOs do not affect the rights of any person other than the Commonwealth and do not impose any liabilities on any person for actions taken before the TCO’s effective date.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which are instrumental in providing duty concessions for certain imported goods. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO on behalf of goods. If the application pertains to goods that are not listed in section 269SJ, which excludes specific goods from eligibility, the CEO must then assess whether the application meets the core criteria outlined in section 269C. This assessment hinges on whether, on the day the application was made, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
Under section 269P(3), if the CEO determines that the application meets these core criteria, a written TCO must be issued. This order specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby conferring a lower duty rate on the specified goods. For example, TCO No. 0617973 was issued for certain fastening tapes, resulting in a duty rate of free, whereas the general duty rate is 5%.
The obligations imposed by the Act require the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any person who believes the TCO should not be made. If no submissions are received, the TCO can proceed without further objection. The TCO is effective from the date the application was lodged, ensuring that it does not retroactively disadvantage any person or impose liabilities for actions taken prior to the TCO’s effective date. This legislative design ensures that the rights of importers are positively impacted, allowing them to apply for duty refunds on goods imported since the TCO’s effective date.
Failure to comply with the provisions of the Customs Act 1901 or the associated regulations could lead to various consequences. Although the explanatory statement does not detail specific offences, penalties, or consequences for breaches, it is reasonable to infer that non-compliance could lead to civil or criminal penalties. The maximum penalties would typically depend on the nature and severity of the breach, as outlined in other relevant sections of the Act or associated regulations. For example, fraudulent applications for TCOs or misrepresentation of facts could potentially attract criminal charges, while administrative errors might result in civil penalties or administrative fines.