EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0926520
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.
Huyck Wangner Australia applied for a TCO in respect of certain fabrics or felts on 24 July 2009.
Instrument
TCO No 0926520 was made on 09 October 2009. It declares that those certain fabrics or felts 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. 0926520 is taken to have come into force on 24 July 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. 0926520, enacted in 2009, amends the Customs Act 1901 to provide tariff concessions for certain fabrics or felts. This legislative instrument responds to an application by Huyck Wangner Australia, which sought a tariff concession for specific goods, given that no substitutable goods were being produced in Australia at the time of application. The instrument was introduced to facilitate smoother importation of these goods by reducing the customs duty from the general rate of 5% to free, thereby enhancing trade efficiency and benefiting importers. The instrument was made under the authority granted by the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders when certain criteria are met, ensuring that the concessions do not disadvantage existing rights or impose new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, as applied under Tariff Concession Instrument No. 0926520, pertains specifically to the application and administration of Tariff Concession Orders (TCOs) for certain fabrics or felts. The Act applies to any person or entity that seeks to import these specific goods into Australia and benefit from the tariff concessions outlined in the TCO. The instrument was formulated in response to an application by Huyck Wangner Australia and came into effect on 24 July 2009, the date the application was lodged. This particular TCO provides for a free rate of duty on the specified fabrics or felts, as opposed to the general rate of 5%, provided no substitutable goods were produced in Australia at the time of application. The instrument applies nationally across Australia, affecting the import procedures and duties applicable to the specified goods. While the TCO does not disadvantage any person or impose liabilities on anyone for actions taken prior to its registration, it does benefit importers by potentially entitling them to a refund of duties paid on these goods since the effective date of the TCO.
Key Provisions
Section 269C of the Customs Act 1901 establishes the core criteria for a Tariff Concession Order (TCO), ensuring that the application for such an order is only considered if no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. Section 269D elaborates on what constitutes "goods produced in Australia," while section 269E explains "ordinary course of business." Furthermore, section 269F details the process through which a person may apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question are not specified in section 269SJ as those ineligible for tariff concessions. If the CEO determines that the application meets the core criteria, they must issue a written TCO as per section 269P(3).
The obligations imposed on parties applying for a TCO are straightforward yet stringent. An applicant must ensure that no substitutable goods are being produced in Australia on the day the application is made, a condition that must be rigorously verified. Additionally, the CEO is obligated to publish a notice in the Gazette, as per subsection 269K(1), inviting submissions from any interested parties who might oppose the granting of a TCO. The CEO must also consider any submissions received and decide on the application based on whether it meets the core criteria as outlined in section 269C. The TCO itself, once issued, comes into effect on the date the application was lodged, as stated in subsection 269S(1).
Failure to comply with the requirements set forth in the Customs Act 1901 can result in serious consequences. Although the explanatory statement does not explicitly list offences or penalties, breaches of the Act could potentially lead to civil or criminal actions under other provisions of the Customs Act or related legislation. These might include fines or imprisonment, depending on the severity of the breach. The absence of specific penalties in this context implies that the general enforcement mechanisms of the Customs Act would apply, which could include substantial fines and imprisonment for more severe infractions.