EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720879
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 belting fabric on 05 December 2007.
Instrument
TCO No 0720879 was made on 29 February 2008. It declares that those certain belting 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. 0720879 is taken to have come into force on 05 December 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. 0720879 was enacted in 2008 under the Customs Act 1901, which is administered by the Parliament of Australia. This legislation was introduced to address the need for a streamlined process to provide tariff concessions for specific goods, ensuring that Australian businesses can import certain items at a reduced customs duty rate if no substitutable goods are produced domestically. This mechanism supports the competitive landscape of Australian industries by potentially lowering import costs for specific goods, thus facilitating better access to materials and components essential for manufacturing and other sectors. The instrument was designed to meet the core criteria specified in the Act, ensuring that tariff concessions are granted only when it is in the public interest and no domestic production of substitutable goods is adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0720879, issued under Part XVA of the Customs Act 1901, applies to individuals and entities seeking tariff concessions for specific goods entering Australia. The instrument pertains to certain belting fabrics and was initiated by an application from Kufferath Australia Pty Ltd on 5 December 2007. The Chief Executive Officer of Customs (CEO) assessed the application and, upon determining that no substitutable goods were produced in Australia in the ordinary course of business, issued the instrument on 29 February 2008. This instrument provides a tariff concession, effectively reducing the duty on these goods from the general rate of 5% to free. The instrument's geographic reach is limited to Australia, applying specifically to the importation of the designated belting fabrics. The instrument does not disadvantage any person or impose liabilities for actions taken prior to its registration. The application of the instrument can be extended or modified through subordinate instruments, and any person considering opposition to the concession had the opportunity to submit objections, none of which were received in this instance.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0720879 are sections 269C, 269F, 269P(3), and 269S of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. The CEO must decide whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), as per section 269P(3). Under section 269S, the TCO is considered to have come into force on the day the application was lodged.
The Act imposes several obligations and requirements on the parties involved. Firstly, a person who wishes to apply for a TCO must ensure their application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria under section 269C. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made, as per subsection 269K(1). If no submissions are received, the CEO proceeds to make the TCO. The rights of importers will be beneficially affected as they will be able to apply for a refund of duty on goods imported since the day the TCO is considered to have come into force under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 does not specify offences, penalties, or consequences for breach in relation to the making of TCOs. However, it is important to note that 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. Any breach of other provisions in the Act or related regulations may incur civil or criminal penalties as prescribed by the relevant sections of the Act or other applicable legislation.