EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922293
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.
Godfrey Hirst applied for a TCO in respect of certain secondary carpet backing fabric on 29 June 2009.
Instrument
TCO No 0922293 was made on 25 September 2009. It declares that those certain secondary carpet backing 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 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. 0922293 is taken to have come into force on 29 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the regulation of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders provide a lower rate of customs duty on specified goods, contingent upon certain criteria being met. The Tariff Concession Instrument No. 0922293, made on 25 September 2009, exemplifies this framework by granting tariff concessions for certain secondary carpet backing fabric, following an application by Godfrey Hirst on 29 June 2009. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus meeting the core criteria outlined in section 269C of the Act. The general duty rate on these goods is 5%, but the TCO reduces this to free duty. The policy objective of this concession is to encourage the importation of these goods by reducing financial burdens, thereby potentially benefiting importers who can apply for duty refunds on imports since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0922293 under the Customs Act 1901 applies to specific goods, in this case, certain secondary carpet backing fabric, and is administered by the Chief Executive Officer of Customs. This instrument is part of a broader scheme where the CEO has the authority to make Tariff Concession Orders (TCOs) that reduce the rate of customs duty for certain goods. The Act applies to individuals or entities that are seeking a tariff concession for goods not produced in Australia in the ordinary course of business. The scope of this Act is national, as it falls under the Commonwealth jurisdiction, affecting trade and import duties across Australia. Exclusions to the application of this Act include goods specified in section 269SJ of the Customs Act 1901, which are ineligible for a tariff concession. The application of the Act can be extended or restricted through subordinate instruments such as regulations and notices, but the primary legislation specifies the conditions under which a TCO may be granted, including the requirement for no substitutable goods to be produced in Australia at the time of the application.
Key Provisions
The Customs Act 1901, particularly Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower customs duty rates on specific goods (s 269F). An applicant may apply for a TCO if the goods are not excluded under section 269SJ (s 269F). For an application to meet the core criteria, it must be demonstrated that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). "Substitutable goods" are those produced in Australia that serve a similar purpose as the goods in question (s 269B, s 269D, s 269E). If the CEO is satisfied that the application meets the core criteria, they must make a TCO (s 269P(3)).
Under this legislation, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to submit their views (s 269K(1)). In this instance, no submissions were received by the CEO in response to the published notice. Furthermore, a TCO is deemed to come into force on the day the application for the TCO was lodged (s 269S(1)). TCO No. 0922293, therefore, is considered effective from 29 June 2009, the date on which the application was lodged.
The obligations imposed by the Act on the CEO include evaluating the TCO application against the core criteria, consulting with the public by publishing a notice in the Gazette, and making a written TCO if the application meets the criteria. The rights of non-Commonwealth persons are protected, as the TCO does not disadvantage them or impose liabilities for actions taken prior to the TCO's effective date (s 269S(1)). Importers benefit from the TCO, as they may apply for a duty refund on goods imported since the TCO's effective date (Reg 126(1)(r)).
Breaching the provisions of the Customs Act 1901 or the regulations can result in various civil and criminal consequences. Under section 275 of the Customs Act, penalties can include fines and imprisonment, with the exact penalties varying depending on the severity of the breach. In the context of TCOs, non-compliance with the terms of the order could lead to financial penalties or other enforcement actions. The maximum penalties for breaches of customs laws can include fines of up to $11,100 for individuals and significantly higher amounts for corporations, along with potential imprisonment terms.