EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931107
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.
Abi Distribution applied for a TCO in respect of certain fabric on 24 August 2009.
Instrument
TCO No 0931107 was made on 03 February 2010. It declares that a certain fabric is 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. One submission objecting to the TCO application was received from Bekaert Australia.
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. 0931107 is taken to have come into force on 24 August 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 Australian Parliament, establishes a framework for managing tariffs and customs duties, with Part XVA introducing the mechanism for Tariff Concession Orders (TCOs). These orders allow for reduced customs duty rates on specific goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative provision aims to address economic and trade policy objectives by facilitating access to certain imported goods at a lower cost, thereby potentially boosting local industries that rely on these imports. The instrument in question, Tariff Concession Instrument No. 0931107, was introduced to provide tariff concessions for a particular fabric, recognising the absence of substitutable goods produced domestically and ensuring compliance with the legislative requirements for TCO applications.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on certain goods. These orders apply to any person who applies for a TCO in respect of goods, provided that the application does not pertain to goods specified in section 269SJ of the Act. The Act mandates that a TCO application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The instrument in question, TCO No 0931107, was made on 3 February 2010 and applies to a certain fabric, granting it a duty-free rate as the CEO determined that no substitutable goods were produced in Australia. The order is effective from 24 August 2009, the date the application was lodged, and does not impose any liabilities or disadvantage any person other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0931107, establish the process and criteria for the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). The CEO of Customs must evaluate an application to determine if it meets the core criteria, which are outlined in sections 269C, 269B, and 269D of the Act. If the application is deemed to meet these criteria, a TCO is issued, as stipulated in section 269P(3), and published in the Gazette, as required by section 269K(1).
The obligations and requirements imposed by this Act on the parties involved are primarily concerned with the application process and the criteria for issuing TCOs. An applicant must submit an application for a TCO to the CEO, who must then assess whether the application meets the core criteria, including the absence of substitutable goods produced in Australia (section 269C). If the application meets these criteria, the CEO is required to issue a TCO and publish it in the Gazette (section 269K(1)). Additionally, the CEO must consider any objections to the application that may be lodged by interested parties (subsection 269K(1)).
The legislation provides for specific offences, penalties, or consequences for breaches. While the primary focus of the Act is on the tariff concession process, failure to comply with the conditions or requirements set out in the TCO itself may lead to civil or criminal consequences. The maximum penalties for breaches of the Customs Act 1901 can include substantial fines or imprisonment, depending on the severity of the offence. However, the Explanatory Statement does not explicitly outline the penalties for breaching the TCO itself. It is important to note that the TCO does not impose any liabilities on persons other than the Commonwealth (subsection 269S(1)).