EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0813995
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.
Bruck Textiles Pty Limited applied for a TCO in respect of certain membrane film breathable on 20 June 2008.
Instrument
TCO No 0813995 was made on 08 September 2008. It declares that those certain membrane film breathable 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. 0813995 is taken to have come into force on 20 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and the regulation of imports and exports. Specifically, Part XVA of the Act provides the mechanism for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. This instrument was introduced to address the need for a streamlined process by which the CEO could grant tariff concessions on certain goods, thereby reducing customs duty rates for those goods. The Tariff Concession Instrument No. 0813995 was made on 8 September 2008 following an application by Bruck Textiles Pty Limited for a TCO on certain membrane film breathable. The CEO was satisfied that no substitutable goods were produced in Australia in the ordinary course of business, meeting the core criteria set out in the Act. As a result, the TCO declared that the specified membrane film breathable would be subject to a free rate of duty, as opposed to the general rate of 5%. This instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on the specified goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on certain goods. This mechanism applies to any person or entity that imports goods into Australia and seeks a reduction in customs duty on those goods, provided that the goods do not fall under the list of prohibited items specified in section 269SJ of the Act. The process involves an application to the CEO, who must determine whether the application meets the core criteria outlined in sections 269C, 269B, and 269D of the Act. The application process also requires public consultation, where the CEO must invite submissions from any interested parties, although in practice, no submissions may be received. TCOs have a national reach, applying across all states and territories of Australia, and they do not affect any pre-existing rights or liabilities of persons other than the Commonwealth. The application of TCOs can be further defined or extended through subordinate instruments, which may include regulations or further orders under the Customs Act or related legislation.
Key Provisions
The Tariff Concession Instrument No. 0813995, issued under section 269F of the Customs Act 1901, pertains to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). This instrument specifically addresses the concession of customs duty for certain membrane film breathable goods. The CEO determined that these goods are subject to a zero duty rate, as no substitutable goods were produced in Australia on the day the application was lodged (sections 269C and 269P(3)). The normal duty rate for these goods is 5%, but the concession reduces this to free.
The Act imposes certain obligations on the parties involved. An applicant, such as Bruck Textiles Pty Limited, must submit an application to the CEO, ensuring it pertains to goods not listed in section 269SJ, which excludes certain goods from TCO eligibility. The CEO, upon receiving the application, must consider whether it meets the core criteria, which includes verifying that no substitutable goods were produced in Australia (section 269C). If satisfied, the CEO must then make a written order, declaring the goods subject to the TCO (section 269P(3)). The CEO is also mandated to publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). In this instance, no submissions were received, and thus, the TCO was issued without opposition.
Failure to comply with the requirements of the Customs Act 1901 may lead to several consequences. While the Act does not explicitly list offences under the TCO framework, any fraudulent application or misrepresentation of facts could potentially lead to civil or criminal penalties under other sections of the Act. For instance, making false statements to the CEO could be considered a breach under the general administrative provisions, attracting penalties as prescribed by the Act. The maximum penalties for such offences could include substantial fines and, in severe cases, imprisonment, depending on the nature and extent of the breach. The TCO itself ensures that it does not disadvantage any person or impose liabilities for actions taken before its registration, thus protecting the rights of existing parties.