EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1035436
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.
Filter Tex Media applied for a TCO in respect of certain needle felts on 02 August 2010.
Instrument
TCO No 1035436 was made on 15 November 2010. It declares that those certain needle 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. 1035436 is taken to have come into force on 02 August 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, includes provisions for the creation of Tariff Concession Orders (TCOs) under Part XVA. These orders can be applied for by any person to the Chief Executive Officer of Customs, with the primary objective of ensuring that such orders are made only when no substitutable goods are produced in Australia. This process is intended to support Australian industries by avoiding the imposition of duties on goods that could be domestically produced, thereby encouraging local production and reducing reliance on imported goods. The Tariff Concession Instrument No. 1035436 was made under this Act on 15 November 2010, following an application by Filter Tex Media for tariff concessions on certain needle felts. The instrument was effective from 2 August 2010, the date the application was lodged, and it lowered the duty rate from 5% to free, provided no objections were raised and none were in this case.
Scope and Application
The Tariff Concession Instrument No. 1035436, established under the Customs Act 1901, applies to any individual or entity seeking a tariff concession order for specified goods, which in this instance are certain needle felts. The Act mandates that a tariff concession order can only be applied for if the goods in question are not specified in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to such concessions. If the Chief Executive Officer of Customs determines that the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business, a tariff concession order is issued. This order provides a lower rate of customs duty, in this case reducing the duty on the specified needle felts from 5% to free. The application of this concession is limited to the Commonwealth of Australia and does not affect any pre-existing rights or impose new liabilities on any individual or entity other than the Commonwealth.
Key Provisions
The main operative sections of this legislation are sections 269F, 269C, and 269P of the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods, provided these goods do not fall under the category of goods specified in section 269SJ. Section 269C outlines the core criteria that a TCO application must meet, namely that on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Section 269P requires the CEO to make a written order if satisfied that the application meets the core criteria, declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their application is made in accordance with the provisions of section 269F and that it meets the criteria set out in section 269C. The CEO has the obligation to evaluate the application to determine whether it satisfies the core criteria and to make a written TCO if satisfied. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission.
Breaches of the Act or non-compliance with the terms of a TCO can lead to various civil or criminal consequences. However, the specific offences, penalties, or consequences are not detailed in the Explanatory Statement. Typically, breaches of customs regulations can lead to fines, penalties, or imprisonment, depending on the severity and intent of the breach. For example, knowingly making a false statement in a customs declaration can result in a fine of up to $22,200 or imprisonment for up to two years, or both, under section 255 of the Customs Act 1901. Additionally, failure to comply with the terms of a TCO might result in the revocation of the concession or other administrative actions.