EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014875
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 And Associates applied for a TCO in respect of certain felts on 26 March 2010.
Instrument
TCO No 1014875 was made on 18 June 2010. It declares that those certain felts 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. 1014875 is taken to have come into force on 26 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, as amended, introduced a mechanism for tariff concession orders (TCOs) to provide relief from customs duties on specific goods, and the Tariff Concession Instrument No. 1014875 is an example of this mechanism in action. Enacted by the Parliament of Australia, this legislation aims to facilitate the importation of goods that are not produced domestically, thereby supporting trade and economic activity. The instrument was introduced to address the gap in the duty structure for goods that have no domestic substitutes, ensuring that these imports are not unduly burdened by tariffs. The explanatory statement for this particular TCO indicates that it was made following an application by Wl Gore And Associates for certain felts, which was approved as no substitutable goods were produced in Australia. The TCO, effective from 26 March 2010, provides a zero rate of duty on these specific goods, aligning with the policy objective of promoting trade by reducing the cost of importing non-domestically produced goods.
Scope and Application
The Tariff Concession Instrument No. 1014875 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs. The instrument pertains to certain felts that were the subject of an application by Wl Gore And Associates. The application was processed under section 269F of the Act, which allows for the concession of tariff rates for goods not produced in Australia in the ordinary course of business, as per the criteria set out in sections 269C, 269D, 269E, and 269P(3). This instrument has a federal jurisdictional reach as it is a Commonwealth instrument. The instrument does not affect the rights of any person other than the Commonwealth and imposes no liabilities on any person. The instrument came into effect on the date the application was lodged, 26 March 2010, in accordance with subsection 269S(1) of the Act. Any exclusions or exemptions from the application of this TCO are determined by the specific criteria outlined in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The main operative sections of the Customs Act 1901, as outlined in the Explanatory Statement, detail the process for the creation and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S, 269SJ). Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods, provided they do not fall under the list of goods in section 269SJ that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, then the CEO must make a TCO. This order declares that the goods subject of the TCO application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by the Act on the parties and entities it governs are primarily on the CEO of Customs. This includes the duty to assess applications for TCOs against the criteria in section 269C, ensuring that the application is not in respect of goods specified in section 269SJ, and to make a written order if the application meets the core criteria. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any interested parties to lodge submissions (subsection 269K(1)). The Act also requires that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged, as specified in subsection 269S(1).
Under the Customs Act 1901, breaches of the requirements to correctly apply for and implement a TCO, or failure to adhere to the provisions regarding the publication of notices in the Gazette, do not explicitly state any specific offences, penalties, or civil/criminal consequences. However, the consequences of a wrongful or improper TCO could potentially include disputes over the duty rates applied to goods, leading to financial repercussions for the Commonwealth or affected parties. The Act ensures that 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 in respect of anything done or omitted to be done before the date of registration. This safeguard is crucial to maintain fairness and legality in the application of the TCOs.