EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706740
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.
Kimberly-Clark Australia Pty Ltd applied for a TCO in respect of certain baby skin wipes on 07 May 2007.
Instrument
TCO No 0706740 was made on 23 July 2007. It declares that those certain baby skin wipes 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. 0706740 is taken to have come into force on 07 May 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for the administration of customs duties, including the process for making Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0706740, made in 2007, was introduced to address the need for tariff concessions on specific goods that are not produced in Australia, thereby facilitating trade by reducing the duty on these imported goods. The explanatory statement details the application process, which involves the Chief Executive Officer of Customs assessing whether an application meets the core criteria set out in the Act, specifically that no substitutable goods are produced in Australia. In this instance, Kimberly-Clark Australia Pty Ltd successfully applied for a tariff concession on certain baby skin wipes, resulting in the general duty rate of 5% being reduced to free. The instrument was registered on the date the application was lodged and does not disadvantage any person other than the Commonwealth, offering benefits to importers through potential duty refunds.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on imported goods, with the scope of application extending to the entire Commonwealth of Australia. Specifically, the Act facilitates the application process for Tariff Concession Orders (TCOs) by allowing the Chief Executive Officer of Customs to grant reduced customs duty rates on goods specified in these orders. To qualify, the goods must not have substitutable equivalents produced in Australia at the time of the application and must meet the core criteria outlined in the Act. The legislation does not apply to goods specified in section 269SJ of the Act, which lists those ineligible for tariff concessions. The geographic reach of this legislation is national, affecting all importers across Australia. The application process includes a public notification requirement under which the CEO must publish an invitation for submissions in the Gazette, although no submissions were received for TCO No. 0706740. The commencement date for the TCO is the date the application was lodged, which in this case was 7 May 2007. Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person except the Commonwealth, thereby ensuring that the rights of importers are positively affected, including the ability to apply for duty refunds on imports since the effective date of the TCO.
Key Provisions
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) under Part XVA, allowing for reduced customs duties on specific goods. Section 269F allows an applicant to request a TCO from the Chief Executive Officer of Customs (CEO) provided the goods are not excluded under section 269SJ. If the CEO determines that the application meets the core criteria, as outlined in sections 269C, 269B, and 269P(3), they must issue a TCO. In the case of Kimberly-Clark Australia Pty Ltd’s application for baby skin wipes on 07 May 2007, TCO No. 0706740 was issued on 23 July 2007, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The obligations imposed by the Act on the CEO include the necessity to ensure that no substitutable goods are being produced in Australia at the time of application and to publish a notice in the Gazette inviting submissions from interested parties. This process ensures transparency and allows stakeholders to voice any concerns about the concession. In this particular case, the CEO did not receive any submissions in response to the published notice, which facilitated the swift issuance of the TCO.
Failure to comply with the requirements set out in the Customs Act 1901 can result in significant legal consequences. While the explanatory statement does not explicitly list offences or penalties for non-compliance, it is reasonable to infer that breaches could lead to civil or criminal penalties under the broader Customs Act framework. These could include fines and imprisonment, depending on the severity and intent of the breach.
The TCO ensures that it does not adversely affect any person’s rights or impose new liabilities, except for the Commonwealth. Importers of the affected goods will benefit from this concession, as they can apply for a refund of duties paid on imports since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations. This provision safeguards the interests of importers and encourages compliance with the new duty rates.