EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922294
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 primary carpet backing fabric on 29 June 2009.
Instrument
TCO No 0922294 was made on 25 September 2009. It declares that those certain primary 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. 0922294 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 was enacted by the Parliament of Australia to provide for the administration of customs and excise duties and to provide for related matters. This Act was introduced to address the need for a streamlined process to grant tariff concessions on imported goods, thereby promoting trade efficiency and supporting industries that may lack domestic production capacity. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce or eliminate customs duties on specific goods, provided certain criteria are met. Specifically, the Act facilitates the reduction of customs duties on goods for which there are no substitutable Australian-produced alternatives, thus encouraging the importation of goods that are not produced domestically. The policy objective of the TCO scheme is to support Australian industries by ensuring that imported goods are subject to competitive tariff rates, ultimately benefiting consumers and industries reliant on imported materials.
Scope and Application
The Tariff Concession Instrument No. 0922294, made under the Customs Act 1901, applies to the concession of tariff rates for specific goods, namely certain primary carpet backing fabric, by granting a Tariff Concession Order (TCO) that lowers the customs duty rate to zero. This legislative instrument targets entities involved in the importation of these specified goods, ensuring they benefit from the reduced tariff rate provided they meet the criteria set out in the Act. The instrument is applicable nationally across Australia and operates under the overarching authority of the Commonwealth, as it pertains to the administration of customs duties. The application of the TCO is contingent upon the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia, thereby meeting the core criteria outlined in section 269C of the Act. Notably, the TCO does not affect any existing rights or liabilities of parties other than the Commonwealth, and it does not impose new liabilities on individuals or entities.
The scope of the instrument is further refined by its exclusions, particularly in relation to goods specified in section 269SJ of the Customs Act, which are ineligible for tariff concessions. Additionally, the application process requires public notification to allow for any objections, although in this instance, no submissions were received. The commencement date of the TCO aligns with the date of the application, providing immediate effect from 29 June 2009. This legislative measure exemplifies the administrative flexibility granted to the CEO in managing tariff concessions while ensuring compliance with the statutory framework.
Key Provisions
The Tariff Concession Instrument No. 0922294 (the Instrument) under the Customs Act 1901 (the Act) applies a concessional tariff rate to certain primary carpet backing fabric. This concessional tariff, which is free of charge, was established following an application by Godfrey Hirst and subsequent approval by the Chief Executive Officer of Customs (CEO) (sections 269F, 269C, 269P(3)). The CEO's decision was based on the determination that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). This means that there were no goods made in Australia that could replace the primary carpet backing fabric for their intended use.
The Instrument imposes certain obligations on the parties it governs. Firstly, it requires the CEO to assess whether an application for a Tariff Concession Order (TCO) meets the core criteria, which includes verifying that no substitutable goods were produced in Australia (section 269C). If the CEO is satisfied with the application, a TCO must be made, and this order specifies the goods to which the concessional tariff applies (section 269P(3)). Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties before making a decision (subsection 269K(1)).
Failure to comply with the provisions of the Act and the Instrument can result in various consequences. Specifically, the Act does not explicitly outline criminal penalties for breaches of its sections. However, any actions that contravene the terms of a TCO could potentially lead to civil consequences, such as financial penalties or liability for unpaid duties. The Act also ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on these persons (subsection 269S(4)).
The commencement date for the Instrument is 29 June 2009, the day the application for the TCO was lodged (subsection 269S(1)). This date signifies the effective implementation of the tariff concession for the specified goods. Importers of the goods in question will benefit from this concession and may apply for a refund of any duty paid on imports made since the TCO's effective date (paragraph 126(1)(r) of the Regulations). This provision ensures that importers are not disadvantaged by the retroactive application of the TCO.