EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721785
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.
Freudenberg Pty Ltd applied for a TCO in respect of certain interlining fabric on 18 December 2007.
Instrument
TCO No 0721785 was made on 07 March 2008. It declares that those certain interlining fabric 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. 0721785 is taken to have come into force on 18 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 Customs Act 1901 was enacted by the Parliament of Australia and provides a framework for the regulation of customs duties and the importation and exportation of goods. This legislation includes provisions for the application of tariff concession orders (TCOs) to certain goods, thereby offering reduced customs duty rates for those goods. The Customs Act 1901 aims to streamline the process of applying for tariff concessions, ensuring that the application process is fair and transparent. The policy objective is to facilitate trade by reducing the cost of imported goods for consumers and businesses, provided that no suitable Australian-made substitutes exist. This approach supports the efficient operation of the customs duty system and aids in maintaining competitive market conditions.
Scope and Application
The Tariff Concession Instrument No. 0721785, made under the Customs Act 1901, pertains to the process of applying for Tariff Concession Orders (TCOs) that lower the rate of customs duty on specific goods. This legislation applies to any person or entity who wishes to apply for a TCO for goods that are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. The instrument is designed to benefit importers of the specified goods by allowing them to apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force, as per the Customs Act 1901 and the Customs Regulations 1995. The scope of this legislation is national, as it operates under the Commonwealth's authority, and it does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in relation to actions taken before the registration date. The application of the Act can be extended or restricted through subordinate instruments, as permitted under the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0721785 (F2008L01151) under the Customs Act 1901 require the Chief Executive Officer of Customs (CEO) to consider applications for Tariff Concession Orders (TCOs) for goods where a lower rate of customs duty applies (sections 269C and 269F). If the CEO is satisfied that the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C), a TCO must be made (section 269P(3)). The TCO instrument declares that the goods the subject of the application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively reducing the duty rate for those goods.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)). This notice invites any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to the invitation. Additionally, the Act ensures that a TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). Importers, however, will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
For breaches of the Customs Act 1901, the Act imposes various offences and penalties. For instance, providing false or misleading information in an application for a TCO can lead to fines or imprisonment, with the maximum penalties varying depending on the severity of the offence. The Act also provides for civil penalties for breaches related to the customs duty and refund processes, with the specifics outlined in the relevant sections of the Act and associated regulations. Additionally, any person who knowingly contravenes the provisions of the Act may be subject to criminal prosecution, which could result in significant fines and imprisonment. The exact penalties for each offence are detailed in the relevant sections of the Customs Act 1901 and associated regulations.