EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812005
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 hydro entangled non woven fabric on 10 June 2008.
Instrument
TCO No 0812005 was made on 22 August 2008. It declares that those certain hydro entangled non woven 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. 0812005 is taken to have come into force on 10 June 2008.
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. 0812005 was enacted in 2008 to address the issue of applying tariff concessions on specific goods under the Customs Act 1901. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which reduce the customs duty on certain imported goods. The explanatory statement details the process and criteria for such concessions, ensuring that substitutable goods are not produced in Australia at the time of application. The policy objective is to facilitate the importation of goods that are not domestically produced, thereby encouraging trade and benefiting importers by potentially allowing them to claim duty refunds. The instrument was published in the Gazette and received no objections, allowing it to come into force on the date of application.
Scope and Application
The Customs Act 1901 applies to individuals and entities who are involved in the importation of goods into Australia. The Act specifically pertains to the application of customs duty on imported goods and the process by which tariff concession orders (TCOs) can be obtained to reduce or eliminate this duty under certain conditions. The Act’s jurisdiction extends across the Commonwealth of Australia, ensuring uniform application of customs regulations and concessions nationwide. Exclusions to the application of TCOs include goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The Act’s scope is further defined by the criteria outlined in sections 269C, 269B, and 269D, which detail the conditions under which a TCO can be granted, such as the non-production of substitutable goods in Australia. The Tariff Concession Order No. 0812005, for example, was issued for certain hydro entangled non-woven fabric, reducing the duty from 5% to free. The application of TCOs can also be extended or restricted through subordinate instruments, allowing for flexibility in the administration of customs duties.
Key Provisions
The Tariff Concession Instrument No. 0812005 under the Customs Act 1901 allows for the application of a lower rate of customs duty to certain goods through the creation of a Tariff Concession Order (TCO). This instrument, effective from 10 June 2008, specifically pertains to hydro entangled non-woven fabric, declaring it subject to a zero rate of duty under item 50 of Schedule 4 of the Customs Tariff Act 1995 (paragraph 3). Section 269C of the Customs Act mandates that a TCO application is valid if, on the date it is lodged, there are no substitutable goods produced in Australia in the ordinary course of business (section 269E). This condition ensures that the concession applies only when there is a genuine lack of domestic production of similar goods.
The obligations imposed by the Customs Act on parties applying for a TCO, such as Freudenberg Pty Ltd in this case, include providing sufficient evidence that the goods in question do not have substitutable equivalents produced domestically (section 269SJ). The Chief Executive Officer of Customs (CEO) has a duty to review the application and verify these claims against the core criteria outlined in section 269C. If satisfied, the CEO must issue a written TCO, as detailed in subsection 269P(3). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received (subsection 269K(1)).
Non-compliance with the requirements or misrepresentation in a TCO application can lead to significant legal consequences. Under section 271 of the Customs Act, any person found guilty of an offence related to the making of a false or misleading statement in an application can face penalties, including substantial fines or imprisonment, or both. The specific penalties are not detailed in the explanatory statement but generally reflect the severity of the offence under Australian law. The Act does not impose any additional liabilities on individuals or entities other than the Commonwealth, thereby protecting them from any financial disadvantage or legal obligation arising from actions taken before the TCO's effective date.