EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717666
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 knitted fabrics on 17 October 2007.
Instrument
TCO No 0717666 was made on 16 January 2008. It declares that those certain knitted 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 7.5%. 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. 0717666 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 administration of customs duties and other charges. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the customs duty on certain goods. This scheme was introduced to address the need for tariff concessions that could facilitate trade and economic growth by reducing the cost of imported goods. The Tariff Concession Instrument No. 0717666, made on 16 January 2008, is an example of this process, where certain knitted fabrics were granted a tariff concession. The policy objective is to ensure that such orders are made fairly and transparently, allowing for public submissions but ensuring minimal disruption to existing rights and liabilities.
Scope and Application
The Tariff Concession Instrument No. 0717666 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO), which, in this case, are certain knitted fabrics. The application of the Act is limited to those entities that have applied for and are granted a TCO, where the Chief Executive Officer of Customs determines that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act thus encompasses the process of applying for a TCO, the evaluation criteria by the CEO, and the subsequent granting of the concession. The instrument has a Commonwealth reach and applies nationally across Australia. It does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, thereby ensuring that the application of the TCO does not disadvantage or create new obligations for third parties prior to its registration. The Act can be extended or restricted through subordinate instruments, which may provide further detail or conditions for specific types of goods or applications.
Key Provisions
The Tariff Concession Instrument No. 0717666, made under section 269P(3) of the Customs Act 1901 (the Act), declares that certain knitted fabrics are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) applies. This means that these specific knitted fabrics will be subject to a free rate of duty instead of the general rate of 7.5% (section 269P(3)). The instrument was published in the Gazette on 16 January 2008 following an application by Nylex Ltd on 17 October 2007 (subsection 269K(1)). The instrument became effective on 17 October 2007, the date the application was lodged (subsection 269S(1)).
The Act imposes several obligations on the Chief Executive Officer of Customs (the CEO) in the process of making a Tariff Concession Order (TCO). Firstly, the CEO must determine whether an application for a TCO meets the core criteria set out in section 269C of the Act, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO (subsection 269K(1)). The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration to their disadvantage or impose liabilities in respect of actions taken before the registration date (subsection 269S(1)).
Under the Customs Act 1901, any failure to comply with the requirements for making a Tariff Concession Order can lead to legal consequences. However, the specific Act does not detail any offences, penalties, or civil or criminal consequences for breach in this context. It is important to note, however, that if the TCO were found to have been improperly granted, there could be implications under broader administrative law principles, potentially leading to judicial review or other remedies. Additionally, if any subsequent actions by the CEO or other officials in administering the TCO were found to be unlawful, this could result in civil or administrative penalties as provided by other applicable laws.