EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1003375
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 Pty Ltd applied for a TCO in respect of certain filter fabric on 19 January 2010.
Instrument
TCO No 1003375 was made on 09 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. 1003375 is taken to have come into force on 19 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, enacted by the Parliament of Australia, established a framework for the imposition of customs duties on imported goods. This legislation introduced Tariff Concession Orders (TCOs) to provide relief from customs duty on specific goods under certain conditions. The Tariff Concession Instrument No. 1003375, issued under this Act, was introduced to address a specific application from Freudenberg Household Products Pty Ltd for tariff concessions on certain filter fabric. The objective of this instrument was to ensure that if no substitutable goods were produced in Australia at the time of the application, the CEO of Customs could grant the tariff concession, thereby providing relief from the general rate of duty which otherwise applies to these goods. The policy objective is to facilitate the import of goods that are not domestically produced, thereby supporting competitive markets and potentially lowering costs for consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking tariff concessions for goods imported into Australia. The process involves an application to the CEO, subject to the condition that the goods are not specified in section 269SJ of the Act, which outlines those goods ineligible for TCOs. The core criteria for a TCO are outlined in section 269C, requiring that no substitutable goods were produced in Australia on the day the application was lodged, with definitions for key terms provided in subsequent sections. The geographic reach of this legislation is national, applying across all states and territories of Australia. The Act allows for the exclusion of certain goods from TCO eligibility, and subordinate instruments may further refine the application and scope of the TCO scheme. In the case of TCO No 1003375, certain filter fabric was granted a tariff concession, with the order coming into effect on the date the application was lodged, 19 January 2010. This order provides for the free entry of these goods, previously subject to a 5% duty rate, with no adverse effect on existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1003375 under the Customs Act 1901 (section 269F) pertain to the procedure for applying for a Tariff Concession Order (TCO) and the conditions under which such an order may be granted. A person may apply to the Chief Executive Officer (CEO) of Customs for a TCO for specified goods if those goods are not among those listed in section 269SJ of the Act, which identifies goods ineligible for a TCO. For the application to meet the core criteria, the CEO must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the application satisfies these criteria, the CEO is required to issue a written TCO declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which in this case applies to the certain filter fabrics (section 269P(3)).
The obligations imposed by this legislation on the parties involved primarily revolve around the application and review process for a TCO. The CEO of Customs has the duty to determine whether an application meets the core criteria by ensuring no substitutable goods were produced in Australia at the time of the application. Once the CEO is satisfied, they must issue a written TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested party to submit objections to the TCO. In this instance, no submissions were received, indicating that the TCO was unopposed.
In terms of the consequences for non-compliance or breaches, the explanatory statement does not specify particular offences, penalties, or consequences for breaching the provisions of this TCO. However, it is implicit that failure to adhere to the conditions set forth by the TCO or the Customs Act 1901 could result in legal repercussions. The general framework of the Customs Act provides for various penalties, including fines and imprisonment, for breaches of customs regulations, though the specifics are not detailed within this explanatory statement. It is essential for entities and individuals to comply with the terms of the TCO to avoid any potential legal consequences associated with non-compliance.