EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937231
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.
Silver Batts Insulation Systems applied for a TCO in respect of certain flat woven polypropylene coated fabric on 01 October 2009.
Instrument
TCO No 0937231 was made on 30 December 2009. It declares that those certain flat woven polypropylene coated 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. 0937231 is taken to have come into force on 01 October 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. 0937231, enacted in 2009, is a legislative measure under the Customs Act 1901 designed to address the need for tariff concessions for specific imported goods. This instrument was introduced to facilitate a reduction in customs duty for certain flat woven polypropylene coated fabrics, allowing for tariff-free import of these goods. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders, which apply lower rates of customs duty to specified goods if certain criteria are met. In this case, the CEO determined that the application for tariff concession met the core criteria, as no substitutable goods were produced in Australia, thereby enabling the issuance of the TCO which grants free import status to the specified fabrics. The objective of this legislation is to ensure that Australian businesses and consumers benefit from tariff reductions on specific imported goods, promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0937231, under the Customs Act 1901, applies to the application process for Tariff Concession Orders (TCOs) by entities or individuals seeking to import goods that may benefit from a lower rate of customs duty. This instrument specifically applies to the certain flat woven polypropylene coated fabric that Silver Batts Insulation Systems applied for on 1 October 2009. The application of this Act is limited to goods that are not specified in section 269SJ of the Customs Act 1901, which excludes certain goods from being subject to a TCO. The scope of this Act is national, as it is governed by the Commonwealth, and its application is subject to the core criteria outlined in the Customs Act 1901, such as the absence of substitutable goods produced in Australia at the time of the application. The TCO does not extend to imposing any liabilities on individuals or entities other than the Commonwealth, and it does not affect any pre-existing rights as of the date of registration. The Act allows for further specification and regulation through subordinate instruments, which may provide additional details on the application and enforcement processes.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0937231 under the Customs Act 1901 (section 269C) mandate that the Chief Executive Officer of Customs (CEO) must assess whether an application for a Tariff Concession Order (TCO) meets the core criteria. Specifically, the CEO must ensure that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This assessment is crucial as it determines the eligibility of the goods for a reduced customs duty rate. Section 269P(3) of the Act then requires the CEO to issue a written TCO if the application meets the core criteria, effectively lowering the duty rate on the specified goods. For instance, in the case of Silver Batts Insulation Systems, the CEO issued TCO No. 0937231 on 30 December 2009, applying a zero duty rate to certain flat woven polypropylene coated fabric, as no substitutable goods were being produced in Australia on the application date.
The Act imposes several obligations on parties involved with the TCO process. Firstly, any person seeking a TCO must ensure their application is lodged in accordance with section 269F and is not for goods specified in section 269SJ, which are ineligible for a TCO. The CEO, upon receiving a valid application, is mandated to publish a notice in the Gazette under section 269K(1) inviting submissions from any interested parties. This transparency measure ensures that all relevant stakeholders have the opportunity to voice their concerns if they believe the TCO should not be granted. Additionally, the CEO must make a decision on the application within the stipulated timeframe and, if the core criteria are met, issue a TCO as required by section 269P(3).
Failure to comply with the requirements set out in the Customs Act 1901 can result in various legal consequences. While the explanatory statement does not explicitly detail penalties for non-compliance, breaches of customs regulations generally attract significant penalties under the Customs Act and associated regulations. For example, misleading or false statements in an application could lead to criminal charges under section 245 of the Customs Act, with penalties including fines up to $22,000 or imprisonment for up to five years, or both. Additionally, civil penalties for incorrect declarations or fraudulent activities can also apply, further underscoring the importance of adhering to the Act's stipulations. The Act also ensures that the rights of importers are protected, allowing them to apply for duty refunds under the relevant regulations, without imposing any liabilities on them for actions taken before the TCO was registered.