EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704153
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.
Albany International Pty Limited applied for a TCO in respect of certain air conveying needlefelt fabrics on 21 March 2007.
Instrument
TCO No 0704153 was made on 08 June 2007. It declares that those certain air conveying needlefelt 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. 0704153 is taken to have come into force on 21 March 2007.
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 Tariff Concession Instrument No. 0704153, enacted in 2007 under the Customs Act 1901, addresses the need to provide tariff concessions for specific imported goods, thereby facilitating trade and economic efficiency. The Customs Act 1901, enacted by the Australian Parliament, established a framework for the application and approval of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The primary policy objective of this instrument is to lower the customs duty for certain air conveying needlefelt fabrics, enhancing their affordability and encouraging their use within Australia. The instrument was introduced to provide relief to importers by ensuring that the goods in question are not subject to the general rate of duty but instead benefit from a zero rate, thereby promoting competitive imports and potentially reducing costs for businesses and consumers.
Scope and Application
The Customs Act 1901 applies to the administration of customs duty, including the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Specifically, Part XVA of the Act governs the process under which TCOs may be applied for and granted when certain conditions are met. The application process is available to any person who meets the criteria set out in the Act, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. Once a TCO application is approved, it applies to the specific goods mentioned in the order, providing a lower rate of customs duty compared to the general rate. This particular legislation is of Commonwealth jurisdiction and thus applies nationally across Australia. There are exclusions, as specified in section 269SJ, which lists goods that cannot be subject to a TCO. The Act may be extended through subordinate instruments, which could further detail the criteria or processes involved in applying for and granting TCOs.
Key Provisions
The Customs Act 1901, under section 269F, allows for the application of Tariff Concession Orders (TCOs) by a person for goods, provided certain conditions are met. The Chief Executive Officer of Customs (CEO) must assess the application to determine if it complies with the core criteria outlined in section 269C. A TCO application meets these criteria if, on the date it was submitted, no substitutable goods were being produced in Australia in the ordinary course of business. The definitions of "substitutable goods" and "ordinary course of business" are provided in sections 269D and 269E respectively. If the CEO determines that the application meets the criteria, they are required by subsection 269P(3) to issue a written TCO, specifying the item in Schedule 4 of the Customs Tariff Act 1995 that applies to the goods in question.
Entities and individuals governed by the Act must ensure their applications for TCOs are lodged correctly and in accordance with the stipulations in sections 269F, 269C, and 269D to 269E. This includes demonstrating that no substitutable goods are being produced in Australia at the time the application is made. Additionally, the CEO is mandated by subsection 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO. This step ensures transparency and allows for stakeholder engagement in the decision-making process.
Failure to comply with the requirements set forth in the Customs Act 1901 regarding TCOs may result in legal consequences. While the Act does not explicitly detail specific offences or penalties for non-compliance with TCOs, breaches of customs regulations generally may lead to criminal charges, fines, or other civil penalties. The severity of these penalties can vary based on the nature and extent of the breach, but they are intended to enforce compliance and maintain the integrity of the customs duty system. Importers and exporters must therefore ensure adherence to the statutory provisions to avoid any adverse legal outcomes.