EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845338
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.
Michael's Fashion Imports applied for a TCO in respect of certain knitted tulle warp fabric on 30 December 2008.
Instrument
TCO No 0845338 was made on 20 March 2009. It declares that those certain knitted tulle warp 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 10%. 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. 0845338 is taken to have come into force on 30 December 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 Commonwealth Parliament, establishes a framework for the administration of customs duties in Australia. This includes the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA, which provide for lower rates of customs duty on certain goods. The primary objective of this legislative mechanism is to ensure that Australian consumers benefit from tariff reductions on goods that are not produced domestically, thus enhancing competition and reducing costs. The explanatory statement for Tariff Concession Instrument No. 0845338, enacted in 2009, outlines the process by which Michael's Fashion Imports applied for and was granted a TCO for certain knitted tulle warp fabric, resulting in the elimination of customs duty on these goods. The instrument came into effect on the date of the application, 30 December 2008, and no submissions were received in opposition to the TCO, indicating broad support for the tariff concession. This measure is intended to improve market access and reduce the cost of these specific imported goods for Australian businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0845338 under the Customs Act 1901 applies to any person, entity, or importer seeking a tariff concession on goods imported into Australia. This Act specifically pertains to the reduction or exemption of customs duty on certain goods as stipulated in the instrument, provided that these goods are not listed in section 269SJ of the Act, which excludes specific goods from being subject to a tariff concession order. The application of this legislation is national, operating within the Commonwealth of Australia, and it does not differentiate based on state or territory boundaries. The instrument extends its application through subordinate instruments, specifically referencing item 50 of Schedule 4 to the Customs Tariff Act 1995, which sets the duty rates for the specified goods. This tariff concession does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken before the registration date. The rights of importers, however, are positively impacted as they can apply for a refund of duty on goods imported since the day the tariff concession order is deemed to have come into force.
Key Provisions
The Tariff Concession Order No. 0845338, under the Customs Act 1901, primarily aims to reduce the customs duty rate for certain knitted tulle warp fabric from the general rate of 10% to free (sections 269F, 269P(3)). This concession is granted upon the application by a party, such as Michael's Fashion Imports, and the approval by the Chief Executive Officer of Customs, provided the application meets the core criteria set out in the Act (section 269C). These criteria include ensuring that no substitutable goods are produced in Australia on the day the application is lodged, which is defined in sections 269D and 269E of the Act. The order takes effect from the date the application was lodged, in this case, 30 December 2008 (subsection 269S(1)).
Entities and individuals governed by this legislation must comply with the application process outlined in the Act, ensuring all criteria are met to avoid any potential penalties for non-compliance. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This ensures transparency and allows interested parties to voice their concerns. In this instance, no submissions were received, allowing the TCO to proceed.
Failure to comply with the requirements of the Customs Act 1901 or the conditions set out in the Tariff Concession Order can result in legal consequences. While the explanatory statement does not specify particular offences or penalties for breaches, it is reasonable to infer that the general provisions under the Customs Act could apply. These may include fines or imprisonment for serious breaches, as typically stipulated under Australian customs legislation. Importers are also granted the right to apply for a refund of duty on goods imported since the TCO came into force, highlighting a procedural safeguard for those benefiting from the concession.
In summary, the Tariff Concession Order No. 0845338 facilitates a reduced customs duty rate for certain knitted tulle warp fabric, provided the application and conditions specified in the Customs Act 1901 are met. The process requires transparency and adherence to the statutory criteria, with potential civil or criminal consequences for non-compliance. Importers stand to gain from this order through duty refunds on eligible goods imported since the order's effective date.