EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918433
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.
Wax Converters Textiles applied for a TCO in respect of certain fabric stenter machine on 01 June 2009.
Instrument
TCO No 0918433 was made on 21 August 2009. It declares that those certain fabric stenter machine 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. 0918433 is taken to have come into force on 01 June 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. 0918433, enacted under the Customs Act 1901, aims to provide relief on customs duties for specific goods that are not produced in Australia, thereby encouraging the importation of these goods without the burden of high tariffs. This instrument was introduced to address the gap in the duty structure for goods that have no local substitutes, ensuring that businesses can access necessary products without excessive costs. Enacted by the Parliament of Australia, the primary objective of this instrument is to facilitate trade by lowering the customs duty on specified goods, which in this case are certain fabric stenter machines, from the general rate of 5% to free. This approach supports the broader policy objective of fostering a competitive and efficient import market.
Scope and Application
The Tariff Concession Instrument No. 0918433, under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain fabric stenter machines, and is aimed at facilitating the importation of these goods into Australia by exempting them from the usual customs duty. This legislation is relevant to entities and individuals involved in the importation of these particular machines, providing them with a tariff concession by reducing the duty on these goods to zero. The instrument is part of a broader scheme outlined in Part XVA of the Customs Act 1901, enabling the Chief Executive Officer of Customs to grant tariff concessions provided certain criteria are met, notably that no substitutable goods are produced in Australia. The geographic reach of this legislation is national, applying across all jurisdictions within Australia. However, the Act excludes certain goods from eligibility for tariff concessions as specified in section 269SJ. The application of this Act can be extended or clarified through subordinate instruments, which may provide further definitions or procedural details to implement the core provisions of the Customs Act 1901.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0918433, revolve around the establishment and effects of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901 (the Act). The CEO of Customs is required to consider applications for TCOs, as per section 269C, where the applicant seeks to reduce customs duty on specific goods, provided these goods are not prohibited under section 269SJ and meet the criteria set out in section 269C. The instrument in question, TCO No. 0918433, was made on 21 August 2009, applying to certain fabric stenter machines, which now attract a duty rate of free, down from the general rate of 5%. This tariff concession is effective from the date the application was lodged, as stipulated in subsection 269S(1) of the Act.
The obligations imposed by the Customs Act 1901 on the parties involved include the requirement for the CEO to assess whether an application for a TCO meets the core criteria, particularly if no substitutable goods are produced in Australia as defined by sections 269D and 269E. Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting public submissions if an application is deemed valid, though in this case, no submissions were received. The Act also mandates that the TCO does not impact the rights of any person other than the Commonwealth in relation to actions taken before the TCO's effective date, as outlined in subsection 269S(1).
The Act does not explicitly detail specific offences or penalties for breaches of the TCO provisions, but general compliance with the Customs Act 1901 would apply. Any failure to comply with the requirements or misrepresentation in an application could potentially lead to civil or criminal penalties under the broader customs legislation, including fines and imprisonment. However, the maximum penalties would be determined by the specific breach and the relevant sections of the Customs Act 1901 or other applicable legislation. The Act ensures that the rights of importers are positively affected, with the ability to apply for duty refunds on imports since the TCO's effective date, without any new liabilities imposed on them.