EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711672
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.
Dust Collection Services Pty Ltd applied for a TCO in respect of certain filter fabrics on 19 July 2007.
Instrument
TCO No 0711672 was made on 12 October 2007. It declares that those certain filter 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 10%. The rate of duty for the goods subject to the TCO is 0%.
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. One submission objecting to the TCO application was received from Albany International Pty Ltd.
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. 0711672 is taken to have come into force on 19 July 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 was enacted to provide a comprehensive framework for the administration of customs duties and related matters in Australia. One of its key features is the scheme under Part XVA, which allows for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for lower rates of customs duty on specific goods. Tariff Concession Instrument No. 0711672, introduced in 2007, is a practical application of this scheme. It was developed in response to an application from Dust Collection Services Pty Ltd for tariff concessions on certain filter fabrics, where the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria. This concession reduces the duty rate from 10% to 0% for these goods. The process involves public consultation as required by the Act, with submissions considered before the final order is made. The policy objective is to ensure that tariff concessions are granted fairly and in accordance with the law, while also promoting trade and economic efficiency by reducing the cost of importing certain goods.
Scope and Application
The Tariff Concession Instrument No. 0711672 under the Customs Act 1901 applies to specific goods, in this case certain filter fabrics, that are the subject of a Tariff Concession Order (TCO). This legislation is pertinent to any entity or individual applying for a TCO and those importing the specified goods, particularly Dust Collection Services Pty Ltd and Albany International Pty Ltd, as evidenced by the case in question. The Act operates within the Commonwealth jurisdiction, governing the application and approval of TCOs by the Chief Executive Officer of Customs, who assesses whether the application for tariff concessions meets the criteria stipulated in the Act, specifically the absence of substitutable goods produced in Australia. The TCO has a national reach, affecting all importers of the specified goods across Australia. The TCO does not impose any liabilities on individuals or entities, and it does not disadvantage or impose liabilities on any person for actions taken before the TCO's effective date. The application and effect of the TCO are further detailed and potentially extended through subordinate instruments and regulations, such as those under the Customs Tariff Act 1995 and the Customs Regulations 1998.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0711672 (referred to as TCO No. 0711672) under the Customs Act 1901 (section 269F) involve the application process for tariff concessions on specific goods and the criteria for approval. According to section 269F, an applicant can request a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). The CEO must then assess whether the application meets the core criteria specified in section 269C, which primarily involves determining whether substitutable goods are produced in Australia (section 269D). If the CEO is satisfied that the application meets these criteria, they must issue a written order under section 269P(3), declaring the goods to which the concession applies.
Entities and individuals governed by this legislation have specific obligations and requirements. They must ensure that any application for a TCO complies with the provisions of section 269F, including providing all necessary information to the CEO. The CEO is obligated to assess each application against the core criteria in section 269C, ensuring that no substitutable goods are being produced in Australia. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any objections to the TCO application, ensuring a transparent process.
The legislation also outlines potential consequences for non-compliance or breach. Although the explanatory statement does not explicitly detail offences or penalties for failing to comply with the TCO provisions, breaches of the Customs Act 1901 generally can lead to various civil and criminal penalties. These may include fines and imprisonment, depending on the severity of the breach. Specifically, section 235 of the Customs Act 1901 provides for penalties, which can include fines of up to $22,200 for individuals and $111,000 for bodies corporate, as well as potential imprisonment for serious offences. Therefore, it is crucial for applicants and the CEO to adhere strictly to the legislative requirements to avoid such repercussions.