EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916641
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.
K E Group applied for a TCO in respect of certain optical cleaning knitted fabric on 15 May 2009.
Instrument
TCO No 0916641 was made on 07 August 2009. It declares that those certain optical cleaning knitted 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. 0916641 is taken to have come into force on 15 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. 0916641 was enacted in 2009 as part of the Customs Act 1901, addressing the need for a streamlined process to provide tariff concessions for specific goods, thus facilitating trade and reducing the duty burden on certain imported items. This instrument was introduced to address the gap where certain imported goods could benefit from tariff concessions if no substitutable goods were produced in Australia at the time of the application. The Customs Act 1901, enacted by the Australian Parliament, provides the legal framework within which these tariff concession orders (TCOs) are made by the Chief Executive Officer of Customs. The policy objective is to support Australian trade by ensuring that importers of certain goods can avail themselves of reduced customs duty rates, thereby making imported goods more competitive in the domestic market. This mechanism ensures that the interests of both importers and Australian producers are balanced, while also encouraging the import of goods that are not produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0916641 applies to the certain optical cleaning knitted fabric that is subject to a Tariff Concession Order (TCO) made under section 269F of the Customs Act 1901. This instrument is applicable to the goods specified in the TCO and to the entities or individuals involved in the importation or production of these goods. The instrument is relevant within the Commonwealth of Australia, as it falls under the purview of the Customs Act 1901. The instrument does not apply to goods specified in section 269SJ of the Act, which are ineligible for a TCO. Additionally, the application process for a TCO involves satisfying core criteria as outlined in sections 269C, 269D, and 269E of the Act, specifically regarding the absence of substitutable goods produced in Australia. The instrument's application can be extended or restricted through subordinate instruments, as permitted under the Customs Act 1901.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0916641 under the Customs Act 1901 include sections 269C, 269F, 269K, 269P, and 269S. Section 269F permits an application for a Tariff Concession Order (TCO) by a person in respect of goods. Section 269C specifies the core criteria an application must meet for a TCO to be considered, particularly ensuring that no substitutable goods are produced in Australia on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, section 269P(3) requires the CEO to make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269K mandates that the CEO publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. Section 269S(1) dictates that the TCO comes into force on the day the application was lodged, in this case, 15 May 2009.
The Act imposes several obligations on the parties involved. The CEO of Customs is obligated to review any TCO application against the core criteria set out in section 269C. The CEO must also publish a notice in the Gazette (section 269K) and consider any submissions received in response to that notice. Importers who benefit from the TCO can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). The Act ensures that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's effective date.
Failure to comply with the requirements of the Customs Act 1901 may lead to various offences and penalties. While the explanatory statement does not detail specific offences under the Act, breaches of customs regulations generally can result in both civil and criminal consequences. Civil penalties may include fines, and criminal penalties can lead to imprisonment, depending on the severity of the breach. The maximum penalties are not explicitly stated in this explanatory statement but can be found in the relevant sections of the Customs Act 1901 and associated regulations. It is essential for all parties to adhere to the Act's provisions to avoid these potential consequences.