EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014566
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.
Wl Gore & Associates applied for a TCO in respect of certain baghouse filter bags on 24 March 2010.
Instrument
TCO No 1014566 was made on 18 June 2010. It declares that those certain baghouse filter bags 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. 1014566 is taken to have come into force on 24 March 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 Australian Parliament, provides a framework for the regulation of goods entering the country through customs, including the imposition of customs duty on those goods. To address specific economic or trade needs, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This mechanism was introduced to ensure that certain goods that are not produced domestically, or for which no suitable substitute is available, receive preferential tariff treatment. This encourages economic efficiency and supports industries that rely on importing specific goods to function. Tariff Concession Instrument No. 1014566, made under this Act on 18 June 2010, grants a tariff concession for certain baghouse filter bags, effectively reducing their duty from 5% to free. This concession was granted following an application by Wl Gore & Associates, and the CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria set out in section 269C of the Act. The instrument came into effect on the date of the application, 24 March 2010, and no objections were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 1014566 under the Customs Act 1901 applies to specific baghouse filter bags that were the subject of an application by Wl Gore & Associates. The Act authorises the Chief Executive Officer of Customs to grant tariff concessions on certain goods, provided the application meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of application. This instrument declares that the aforementioned baghouse filter bags are subject to a free rate of duty, as opposed to the general rate of 5%, because no substitutable goods were being produced domestically. The geographic and jurisdictional reach of this Act is national, as it pertains to the importation of goods into Australia and the application of customs duties. The Act does not specify any exclusions or exemptions beyond those outlined in section 269SJ, which lists goods that cannot be subject to a TCO. The commencement date of the TCO is the same as the date the application was lodged, 24 March 2010, and it does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, under Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (CEO). Section 269F (1) allows an individual to apply to the CEO for a TCO concerning specific goods. If the CEO deems the application valid and not pertaining to goods outlined in section 269SJ, which are ineligible for a TCO, the CEO must then determine if the application meets the core criteria set out in section 269C. To meet these criteria, the application must demonstrate that on the day it was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269B of the Act. If the CEO is satisfied that these conditions are met, they must issue a written TCO, as specified in section 269P(3), effectively applying a prescribed item from Schedule 4 of the Customs Tariff Act 1995 to the goods in question.
The obligations imposed by the Customs Act 1901 on the parties involved, particularly the CEO, include ensuring that any TCO application is assessed against the core criteria. The CEO must also publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not proceed. This is stipulated in subsection 269K(1). In the case of TCO No. 1014566, the CEO was satisfied that no substitutable goods were produced in Australia for the specified baghouse filter bags, thus meeting the core criteria. Consequently, the CEO issued the TCO on 18 June 2010, applying a duty-free status to the goods. This decision was made on 24 March 2010, the day the application was lodged, as outlined in subsection 269S(1).
The Customs Act 1901 imposes certain requirements on the parties involved. The CEO must ensure that any TCO is made only if the application meets the core criteria and that all eligible parties have been given the opportunity to submit objections. For applicants, the key requirement is to demonstrate that no substitutable goods are being produced in Australia. In the case of TCO No. 1014566, the applicant, Wl Gore & Associates, successfully demonstrated that no substitutable goods were produced in Australia for the baghouse filter bags in question. The Act also requires that the TCO does not affect the rights of any person other than the Commonwealth in a manner that disadvantages them or imposes liabilities. This ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the TCO came into force.
Under the Customs Act 1901, breaches of the requirements and provisions of a TCO can lead to civil or criminal consequences. For instance, if an entity or individual fails to comply with the conditions set out in a TCO, they may be subject to penalties. The maximum penalties for breaches can vary but generally include fines and, in severe cases, imprisonment. The Act ensures that all parties are held accountable for any non-compliance with the terms of the TCO. This serves to maintain the integrity of the tariff concession scheme and ensures that benefits are granted only to those who meet the specified criteria.