EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717665
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.
Nylex Ltd applied for a TCO in respect of certain woven polyester fabrics on 17 October 2007.
Instrument
TCO No 0717665 was made on 16 January 2008. It declares that those certain woven polyester 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. 0717665 is taken to have come into force on 17 October 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties. It was introduced to address the need for a comprehensive system to manage the import and export of goods, ensuring efficient collection of duties and control over the movement of goods across borders. Part XVA of the Act introduces the concept of Tariff Concession Orders (TCOs), which allow the Chief Executive Officer of Customs to apply lower customs duty rates to specified goods under certain conditions. This provision was designed to facilitate trade by reducing costs for businesses importing specific goods that are not produced domestically, thereby promoting economic efficiency and competitiveness.
The Tariff Concession Instrument No. 0717665, made under the authority of the Customs Act 1901, provides a concrete example of this framework in action. In this case, the instrument was made in response to an application by Nylex Ltd for a TCO concerning certain woven polyester fabrics. The instrument was issued on 16 January 2008, following a determination by the CEO that no substitutable goods were produced in Australia, thus meeting the core criteria for a concession. The policy objective here is to support businesses by reducing the cost of importing specific goods, thereby enhancing their ability to compete in the market and potentially lowering prices for consumers.
Scope and Application
The Tariff Concession Instrument No. 0717665, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain woven polyester fabrics, and is intended to provide a tariff concession by way of a Tariff Concession Order (TCO). This instrument was made in response to an application by Nylex Ltd, who sought a TCO for the specified goods on 17 October 2007. The instrument, effective from the same date, grants these goods a reduced rate of customs duty of free, as opposed to the general rate of 5%, by declaring that they are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995. The TCO is applicable nationally, and it does not impose any liabilities on any person, including importers, who may benefit from a refund of duty for goods imported since the date the TCO was taken to have come into force. The instrument also notes that it does not affect the rights of any person in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO's registration.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269K, 269P, and 269S. Section 269F permits a person to apply to the CEO for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be satisfied for the CEO to consider granting a TCO, which is when no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written TCO order. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, and section 269S specifies that a TCO comes into force on the day the application is lodged.
The obligations imposed by the Act include the requirement for the CEO to assess applications against the core criteria and, if satisfied, to make a written TCO. The CEO is also obligated to publish a notice in the Gazette inviting submissions from interested parties and to consider any submissions received. For the applicant, the obligation is to ensure that the application is made in accordance with the requirements of the Act, providing all necessary information and evidence to support the application. The obligations for the public include the right to lodge submissions if they believe the TCO should not be made.
In terms of consequences for breaches, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for breaches related to the process of applying for and making a TCO. However, any misrepresentation or provision of false information in the TCO application process could potentially result in administrative penalties under the relevant sections of the Customs Act 1901. This might include fines or other administrative actions, though the exact penalties are not detailed in the explanatory statement provided. The Act primarily focuses on the procedural aspects of making TCOs rather than prescribing specific penalties for breaches.