EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001858
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.
Freudenberg Household Products applied for a TCO in respect of certain filter fabric on 11 January 2010.
Instrument
TCO No 1001858 was made on 07 April 2010. It declares that those certain filter 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. 1001858 is taken to have come into force on 11 January 2010.
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 provide a framework for the regulation of customs and excise in Australia, including the imposition of customs duty on imported goods. The Act was introduced to address the need for a structured system to manage the import and export of goods, ensuring compliance with relevant laws and regulations. The Tariff Concession Instrument No. 1001858, made under the Customs Act 1901, was introduced to provide relief on customs duties for specific goods, in this case, certain filter fabric. This was enacted to benefit particular industries by reducing the financial burden of customs duties, thereby encouraging production and trade. The instrument was created by the Chief Executive Officer of Customs in accordance with section 269F of the Act, following an application from Freudenberg Household Products on 11 January 2010. The instrument was finalised on 7 April 2010, and it was communicated to the public via a Gazette notice, inviting any interested parties to lodge submissions, though none were received. The tariff concession came into effect on the date the application was lodged, and it does not disadvantage any person or impose liabilities on anyone for actions taken prior to the concession’s registration.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 1001858, pertains to the application and approval of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument specifically applies to entities or individuals who have applied for tariff concessions on certain goods, in this case, Freudenberg Household Products for certain filter fabric. The scope of the Act extends to goods that are subject to TCOs, provided they meet the criteria outlined in the Act, such as the absence of substitutable goods produced in Australia at the time of application. The geographic reach of the Act is national, applying across Australia as per the Commonwealth legislation. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ of the Customs Act 1901. The application of this Act can be extended or modified through subordinate instruments, allowing for flexibility in its implementation. The Tariff Concession Order No. 1001858, which came into force on the date of application (11 January 2010), provides a tariff concession for the specified filter fabric, reducing the customs duty rate from 5% to free, thereby benefiting importers of these goods.
Key Provisions
The Tariff Concession Instrument No. 1001858 under the Customs Act 1901 provides a lower rate of customs duty for certain goods specified in the instrument. Specifically, the instrument applies to certain filter fabrics, granting them a free rate of duty instead of the general rate of 5% (Section 269P(3)). This concession applies as of the date the application was lodged, which is 11 January 2010 (Subsection 269S(1)). The application for this concession was made by Freudenberg Household Products on 11 January 2010 and the instrument was made on 7 April 2010 (Section 269P(3)).
Entities such as Freudenberg Household Products must meet certain criteria to apply for a Tariff Concession Order (TCO). They must demonstrate that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility (Section 269F). The Chief Executive Officer of Customs (CEO) must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (Section 269C). Definitions of key terms like "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in the Act (Sections 269D, 269E, and 269F respectively). Once these criteria are met, the CEO must issue a written TCO (Section 269P(3)).
The CEO has the obligation to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons the TCO should not be made to lodge a submission (Subsection 269K(1)). In this case, no submissions were received in response to the published notice. The rights of importers will be beneficially affected by this TCO, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO (Paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any liabilities on any person, nor does it disadvantage any person in respect of anything done or omitted before the date of registration (Subsection 269S(1)).
Breaching the requirements set out in the Customs Act 1901 and associated regulations can lead to various consequences. Misrepresentation of facts in an application for a Tariff Concession Order can result in penalties under section 275 of the Act, which can include fines and imprisonment. For instance, providing false or misleading information can lead to a maximum penalty of $22,000 or imprisonment for two years, or both, for individuals, and higher penalties for bodies corporate (Section 275). Additionally, failure to comply with refund applications under the Regulations may also incur civil penalties, depending on the specific provisions of the Regulations.