EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916018
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.
Ricky Richards Sales applied for a TCO in respect of certain polyester fabrics on 12 May 2009.
Instrument
TCO No 0916018 was made on 31 July 2009. It declares that those certain polyester fabrics 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. 0916018 is taken to have come into force on 12 May 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 Tariff Concession Instrument No. 0916018, enacted in 2009, provides for tariff concessions under the Customs Act 1901. This legislation was introduced to address the need for a streamlined process to reduce customs duty on certain imported goods, facilitating trade and economic growth. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with section 269F of the Customs Act 1901, following an application from Ricky Richards Sales for tariff concessions on specific polyester fabrics. The policy objective of this instrument is to ensure that the application of tariff concessions does not disadvantage existing Australian producers, while also promoting the efficient importation of goods by reducing duty rates.
This instrument operates under the framework established by Part XVA of the Customs Act 1901, which allows for the creation of Tariff Concession Orders when certain criteria are met, including the absence of substitutable goods produced in Australia. The Customs Act 1901, administered by the Parliament of Australia, aims to provide a structured approach to customs duties and tariff concessions, ensuring that trade policies support both domestic industries and international trade. By reducing the duty on the specified polyester fabrics from 5% to free, the instrument directly benefits importers, aligning with the overarching goal of fostering economic activity through effective trade regulation.
Scope and Application
The Tariff Concession Instrument No. 0916018, issued under the Customs Act 1901, applies to entities or individuals who have applied for tariff concessions on specific goods, in this case certain polyester fabrics. The Act allows for the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) which reduces the duty on certain imported goods, provided the goods are not produced in Australia and there are no substitutable goods available domestically. The concession is effective from the date the application is lodged, making the import of these fabrics duty-free. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth in respect of actions taken prior to the order's registration. The application of this TCO is governed by the overarching provisions of the Customs Act 1901, which includes specific criteria and exclusions as outlined in sections 269C, 269D, and 269SJ of the Act. The application process and the decision-making authority of the CEO may be further detailed in subordinate instruments and regulations.
Key Provisions
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs) through Part XVA. A TCO applies a reduced rate of customs duty to specified goods. Section 269F of the Act allows for applications to the Chief Executive Officer of Customs (CEO) for such orders, with the CEO required to evaluate whether the application meets the core criteria outlined in section 269C. Specifically, the CEO must determine if no substitutable goods were produced in Australia at the time of application, as per section 269D. If satisfied, the CEO issues a TCO as per section 269P(3), specifying the applicable tariff item.
Under this Act, the CEO is mandated to publish a notice in the Gazette upon accepting an application, inviting any interested parties to submit reasons against the TCO, as per subsection 269K(1). In the case of TCO No. 0916018, no submissions were received in response to this invitation. Additionally, the TCO is deemed to have come into effect on the date the application was lodged, as stated in subsection 269S(1). For instance, TCO No. 0916018, concerning certain polyester fabrics, is considered effective from 12 May 2009. It is important to note that this TCO does not disadvantage any non-Commonwealth entities or impose liabilities for actions taken before its registration.
The obligations under this Act require the CEO to carefully assess TCO applications, ensuring compliance with the core criteria and inviting public submissions. The CEO must also ensure the effective date of the TCO aligns with the application date, thereby avoiding any retrospective disadvantages or liabilities for parties not within the Commonwealth. The Act further mandates that the rights of importers are preserved and can benefit from duty refunds under certain regulations, such as paragraph 126(1)(r) of the Regulations, for imports made since the TCO's effective date.