EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720488
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.
Ricky Richards Pty Ltd applied for a TCO in respect of certain 0720488 on 30 November 2007.
Instrument
TCO No 0720488 was made on 29 February 2008. It declares that those certain knitted 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. 0720488 is taken to have come into force on 30 November 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 Tariff Concession Instrument No. 0720488, enacted under the Customs Act 1901, addresses the need for a streamlined process to grant tariff concessions for specific goods. This instrument was introduced to facilitate the application process for tariff concessions by the Chief Executive Officer of Customs, ensuring that eligible goods benefit from reduced customs duty rates. The purpose of this legislation is to provide relief to importers by making the concession process more accessible and responsive to market needs. The instrument was enacted by the relevant authority under the Customs Act 1901 and aims to ensure that the application process is efficient, transparent, and fair, allowing for timely tariff adjustments that benefit the importing community without imposing undue burdens or liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking a concession on customs duties for specific goods, provided the goods are not those specified in section 269SJ of the Act, which lists goods that are ineligible for a TCO. The process begins with an application to the CEO, who must determine if the application meets the core criteria set out in section 269C, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business. Once the CEO is satisfied, a TCO is issued, granting a lower rate of duty or duty-free status to the specified goods. The geographic reach of the Act is national, as it pertains to goods entering Australia. The TCO does not affect existing rights or liabilities of persons other than the Commonwealth, and it does not impose any new liabilities. Notably, the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0720488, under the Customs Act 1901, establish the framework for the creation and implementation of Tariff Concession Orders (TCOs). Section 269F allows for the application for a TCO, while section 269C outlines the core criteria that must be met for the CEO to approve the application. If the CEO is satisfied that no substitutable goods are produced in Australia, as defined by sections 269D and 269E, and the application is not for goods listed in section 269SJ, the CEO must make a TCO (section 269P(3)). This order specifies the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively reducing the duty rate from 5% to free for the specified goods.
The obligations imposed by this Act on the parties involved are clearly defined. Ricky Richards Pty Ltd, as the applicant, must ensure that their application meets the specified core criteria, particularly the absence of substitutable goods produced in Australia. The CEO of Customs is mandated to assess the application against these criteria and, if satisfied, to publish a notice in the Gazette inviting submissions from any interested parties. If no objections are received, the CEO must then proceed to make the TCO. Importers, on the other hand, must be aware of their rights to apply for a refund of duty under Regulation 126(1)(r) for goods imported since the TCO came into effect.
Breaches of the provisions outlined in the Customs Act 1901 can lead to significant consequences. While the explanatory statement does not detail specific offences, the general principles of the Act imply that non-compliance with the TCO provisions could lead to civil or criminal penalties. The Act provides for penalties such as fines and imprisonment for offences against the Customs Act. However, the exact penalties for breaching TCO-specific provisions are not specified within this document. It is essential for all parties to adhere to the legislative requirements to avoid potential legal repercussions.