EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904162
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.
Coman Textiles applied for a TCO in respect of certain quilted bedcovering fabric on 06 February 2009.
Instrument
TCO No 0904162 was made on 17 April 2009. It declares that those certain quilted bedcovering 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. 0904162 is taken to have come into force on 06 February 2009.
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, provides a framework for the administration of customs and excise in Australia, including the imposition of customs duties and the granting of tariff concessions. The problem or gap addressed by this Act, particularly in relation to Tariff Concession Orders (TCOs), is to provide relief from customs duties for goods that are not produced in Australia and for which there are no substitutable goods available domestically. This facilitates the importation of such goods, thereby supporting industries that rely on imported materials and potentially lowering consumer prices.
The Tariff Concession Instrument No. 0904162, made under the Customs Act 1901, was introduced to provide tariff concessions for certain quilted bedcovering fabric. The policy objective here was to ensure that importers of these goods would not be subject to the general customs duty rate, which is 10%, but instead benefit from a duty-free rate. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. The instrument was published in the Gazette, with no submissions opposing the concession, and it came into effect on the date the application was lodged, 06 February 2009.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities that seek to import goods eligible for tariff concessions, thereby reducing the duty payable on specified items. The scope of the Act is primarily concerned with the importation of goods and the associated customs duty implications. It extends to any person or entity wishing to import goods into Australia, subject to the conditions set out in the Act. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. The Act's provisions are not limited to specific industries but rather apply to any goods that meet the criteria for tariff concessions. The Act includes exclusions for certain goods specified in section 269SJ, which cannot be subject to a TCO. The application of the Act can be further refined through subordinate instruments, which may specify additional details or criteria for the application of tariff concessions.
Key Provisions
The Customs Act 1901, as amended, facilitates the establishment of Tariff Concession Orders (TCOs) through Part XVA, allowing for reduced customs duty rates on specified goods. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO determines that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs, the CEO must then assess whether the application meets the core criteria. Section 269C outlines that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D and 269E of the Act. In this instance, "substitutable goods" refer to Australian-produced goods that serve a similar purpose to the goods in question.
Entities subject to the Act must comply with the requirements for applying for a TCO, ensuring that their applications are lodged in accordance with the statutory provisions. The CEO’s role involves verifying that the goods in question are not already produced in Australia and that the application aligns with the criteria set out in the Act. Once the CEO is satisfied that the application meets the core criteria, a written TCO is issued under section 269P(3), specifying the goods and the applicable tariff reduction. For example, Coman Textiles applied for a TCO for certain quilted bedcovering fabric on 6 February 2009, and the CEO issued TCO No. 0904162 on 17 April 2009, declaring these goods to be tariff-free.
The Act also imposes procedural obligations on the CEO, including publishing a notice in the Gazette after accepting a valid TCO application, inviting submissions from interested parties. If no objections are received, the TCO is considered approved. The CEO published a notice regarding the Coman Textiles application but did not receive any objections, leading to the issuance of TCO No. 0904162. The TCO's commencement date aligns with the date the application was lodged, meaning it came into force on 6 February 2009. This ensures that the rights of third parties are not adversely affected by the TCO, as specified in subsection 269S(1).
Section 269K(1) and the Regulations under section 126(1)(r) further stipulate that importers can apply for a refund of duty on goods imported since the TCO's effective date. Any breach of the Act's provisions may result in penalties, although specific penalties are not detailed in the explanatory statement. The Act’s framework aims to provide clarity and ensure that tariff concessions are granted fairly and in accordance with the statutory requirements.