EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942509
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.
Hennessy Corporation applied for a TCO in respect of certain knitted fabrics on 11 November 2009.
Instrument
TCO No 0942509 was made on 29 January 2010. It declares that those certain knitted fabrics 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 7.5%. 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. 0942509 is taken to have come into force on 11 November 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 to regulate the import and export of goods in Australia, and to provide for the collection of duties and taxes on imported goods. One of the mechanisms introduced by the Act is the Tariff Concession Order (TCO), which allows for the reduction or elimination of customs duty on certain goods. The Tariff Concession Instrument No. 0942509, made under the Customs Act 1901, provides for tariff concessions on specific knitted fabrics, reducing their customs duty from 7.5% to free. This instrument was enacted by the Chief Executive Officer of Customs, following an application by Hennessy Corporation and after determining that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The policy objective is to promote trade and industry by reducing the cost of imported goods, thereby making them more competitive in the Australian market. The instrument came into effect on 11 November 2009, the date the application was lodged, and does not affect any existing rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0942509 under the Customs Act 1901 applies to the specific case of certain knitted fabrics for which Hennessy Corporation applied for a tariff concession order (TCO). The Act facilitates the application process for TCOs by allowing individuals or entities to apply to the Chief Executive Officer (CEO) of Customs, provided the goods in question are not those specified in section 269SJ of the Act that cannot be subject to a TCO. The CEO's decision to grant a TCO hinges on the fulfilment of core criteria, primarily whether no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. If these criteria are met, the CEO issues a written order reducing or eliminating the customs duty on the specified goods. This particular TCO, effective from 11 November 2009, grants free tariff treatment to certain knitted fabrics, which would otherwise attract a 7.5% duty rate. The CEO is mandated to consult with the public by publishing notices in the Gazette, although in this instance, no objections were received. The TCO does not retroactively disadvantage any person or impose liabilities for actions taken prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 0942509, under the Customs Act 1901, establishes a tariff concession order (TCO) for certain knitted fabrics, allowing them to be imported without incurring the general customs duty of 7.5%. This is detailed in section 269P(3) of the Act, which mandates that if the Chief Executive Officer of Customs (CEO) determines that the application for a TCO meets the core criteria, they must issue a written order specifying the reduced duty rate applicable to the goods. The CEO was satisfied in this case because no substitutable goods were being produced in Australia, in accordance with sections 269C and 269SJ of the Act. Section 269K(1) also requires that an invitation for objections to the TCO be published in the Gazette, although no submissions were received in this instance.
The obligations imposed by the Act on the parties involved are primarily centred around the application and assessment process. The applicant, in this case Hennessy Corporation, must submit a valid application under section 269F, ensuring it does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. The CEO, upon receiving the application, must evaluate whether it meets the core criteria outlined in section 269C and, if satisfied, issue the TCO under section 269P(3). Additionally, as per section 269K(1), the CEO is required to publish a notice in the Gazette inviting objections to the TCO, although this step did not result in any submissions in this scenario.
In terms of breaches and penalties, the Customs Act 1901 does not explicitly detail specific offences or penalties related to the TCO process itself. However, the broader legislative framework under which the Customs Act operates includes provisions for penalties and enforcement actions. For example, knowingly making a false statement in an application or in any document required under the Act could lead to fines or imprisonment under the general enforcement provisions of the Act. The specific penalties for breaches are typically outlined in the Customs Regulations 1993, which might include pecuniary penalties for non-compliance or other administrative actions deemed necessary by the relevant authorities.