EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708725
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.
Kufferath Australia Pty Ltd applied for a TCO in respect of certain man made belting fabric on 07 June 2007.
Instrument
TCO No 0708725 was made on 17 August 2007. It declares that those certain man made belting fabric 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 10%. 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. 0708725 is taken to have come into force on 07 June 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 Australian Parliament, established a framework for administering customs duties and facilitating trade. To address the issue of fostering economic efficiency and competitiveness by reducing customs duties on specific imported goods, the Act incorporates provisions for Tariff Concession Orders (TCOs) under Part XVA. The Tariff Concession Instrument No. 0708725 was introduced to provide tariff concessions for certain man-made belting fabric, effectively reducing the customs duty rate from 10% to free, as long as the goods meet the specified criteria and are not substitutable by Australian-produced items. The enactment of this instrument aimed to support Australian industries by ensuring that the concessions do not disadvantage existing rights and impose no new liabilities, while also potentially benefiting importers through duty refunds on eligible goods.
Scope and Application
The Tariff Concession Instrument No. 0708725, made under the Customs Act 1901, applies to the concession of customs duty rates on certain man-made belting fabric. Specifically, the instrument was made following an application by Kufferath Australia Pty Ltd, which sought a tariff concession order (TCO) for the specified goods. This legislation operates to reduce the general rate of duty on these goods from 10% to free, provided that the application meets the core criteria outlined in section 269C of the Act. The TCO applies to any person or entity importing these specific goods into Australia and is effective from the date the application was lodged, 7 June 2007. It is noteworthy that the TCO does not retroactively affect any rights or liabilities of persons other than the Commonwealth and imposes no new liabilities upon any person. The instrument extends the application of the Customs Act 1901 by providing for tariff concessions on specified goods, subject to the conditions and criteria set out in the Act and its subordinate instruments.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) under consideration here are sections 269C, 269F, 269K, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for goods. Section 269C outlines the core criteria that must be satisfied for a TCO application to be considered, which includes ensuring that no substitutable goods are produced in Australia at the time of the application. Section 269K mandates that the CEO must publish a notice in the Gazette inviting any person who believes a TCO should not proceed to submit their reasons. Finally, section 269S stipulates that a TCO is deemed to come into force on the day the application is lodged. In this case, Tariff Concession Order No. 0708725 was made on 17 August 2007 for certain man-made belting fabric, applying a duty rate of free, as opposed to the general rate of 10%.
The Act imposes several obligations and requirements on both the CEO and applicants for TCOs. The CEO must first determine if the application complies with the core criteria specified in section 269C. This involves verifying that no substitutable goods are produced in Australia, as defined by sections 269D and 269E. Additionally, the CEO is required to publish a notice in the Gazette under section 269K, soliciting submissions from any interested parties who might oppose the TCO. The CEO must then consider any submissions received before deciding whether to proceed with the TCO. In this specific case, Kufferath Australia Pty Ltd applied for a TCO on 7 June 2007, and no submissions were received in response to the published notice.
Breaching the requirements of the Customs Act 1901 can result in various civil or criminal consequences. While the Act does not explicitly state penalties for failing to comply with the TCO process, breaches of customs regulations generally carry significant penalties. For example, under section 212 of the Customs Act, knowingly making a false statement or providing misleading information in a customs declaration can result in a penalty of up to $22,200 or imprisonment for up to two years, or both. Furthermore, any fraudulent activities related to evading customs duty can incur severe penalties, including fines of up to $277,500 and imprisonment for up to 10 years under section 228. Although the specific case of Tariff Concession Order No. 0708725 does not involve penalties, adherence to the Act's provisions is crucial to avoid legal repercussions.