EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949319
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.
Thiess John Holland applied for a TCO in respect of certain nonwoven polypropylene geotextiles on 18 December 2009.
Instrument
TCO No 0949319 was made on 05 March 2010. It declares that those certain nonwoven polypropylene geotextiles 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. 0949319 is taken to have come into force on 18 December 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, provides a framework for the administration of customs and excise duties, including a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This scheme was introduced to address the need for reducing customs duty on certain goods that are not produced in Australia and for which there are no substitutable goods produced domestically. Specifically, the Customs Act 1901, through Part XVA, empowers the CEO to apply a lower rate of customs duty on goods that meet specific criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. The policy objective is to provide economic benefits to businesses and consumers by reducing the cost of imported goods that are essential and not manufactured locally. This process ensures that the Australian market remains competitive while encouraging the production of goods within Australia where feasible.
Scope and Application
The Tariff Concession Instrument No. 0949319 applies to certain nonwoven polypropylene geotextiles and is a measure under Part XVA of the Customs Act 1901, which facilitates tariff concessions on goods not produced in Australia in the ordinary course of business. This instrument was made in response to an application by Thiess John Holland, and it is applicable to the specific goods identified in the application, ensuring that they are subject to a lower rate of customs duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this instrument is national in scope, falling under the Commonwealth's jurisdiction. It is important to note that the instrument does not affect any pre-existing rights or impose liabilities on any persons other than the Commonwealth, ensuring that it only benefits the rights of importers by allowing them to apply for duty refunds on goods imported from the date the TCO is considered effective. The process of creating such instruments can be extended through subordinate instruments as outlined in the Act.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0949319, under the Customs Act 1901, revolve around the provisions for Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application meets the core criteria, which include the absence of substitutable goods produced in Australia on the day the application was lodged, the CEO must make a written TCO (section 269C). This written order declares that the goods in question are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Specifically, TCO No. 0949319 declares that certain nonwoven polypropylene geotextiles are subject to a free rate of duty, instead of the general 5% duty rate.
The Customs Act 1901 imposes certain obligations on the parties involved. For the CEO, the obligation is to determine whether an application for a TCO meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia on the application date (section 269C). If the criteria are met, the CEO must issue a TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions on the proposed TCO, allowing interested parties to voice any objections (subsection 269K(1)). In this case, no submissions were received in response to the published notice.
Breach of the provisions outlined in the Customs Act 1901 may lead to civil and criminal consequences. However, the explanatory statement does not specify offences, penalties, or consequences for non-compliance with the TCO or its related processes. The Act generally provides for penalties for breaches related to customs duty and other customs-related activities, but these are not detailed in the provided text. The TCO itself, however, does not impose any liabilities on any person and does not affect the rights of individuals or entities except to beneficially affect the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).