EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041007
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 06 September 2010.
Instrument
TCO No 1041007 was made on 22 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. 1041007 is taken to have come into force on 06 September 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 Tariff Concession Instrument No. 1041007, made under the Customs Act 1901, was enacted to address a specific need for tariff concessions on certain goods imported into Australia. This instrument was introduced to facilitate reduced customs duty rates for goods that do not have Australian-produced substitutes, thereby supporting the competitive landscape and economic interests of importers. The instrument was created in response to an application by Filter Tex Media for tariff concessions on certain needle felts, and it was enacted by the Chief Executive Officer of Customs after determining that the application met the core criteria stipulated in the Act.
The Customs Act 1901, administered by the Parliament of Australia, aims to streamline the process for granting tariff concessions to ensure that Australian importers are not at a disadvantage when importing goods that do not have locally produced alternatives. The policy objective of this legislation is to encourage trade by reducing the financial burden on importers, thereby fostering economic growth and maintaining fair trading practices. The Customs Act 1901 allows for the creation of Tariff Concession Orders that provide specific tariff benefits to certain imported goods, subject to certain conditions and criteria being met.
Scope and Application
The Customs Act 1901 applies to the process of granting tariff concession orders (TCOs) to ensure that certain goods are subject to lower rates of customs duty. This Act applies to any person or entity that seeks to import goods that qualify for a TCO, as determined by the Chief Executive Officer (CEO) of Customs. The geographic reach of the Act extends across Australia, as it is a Commonwealth legislation. The Act is designed to provide tariff concessions on goods that are not produced in Australia and have no substitutable goods locally, ensuring that such imports do not adversely affect domestic production. Notably, the Act does not apply to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The application of the Act may be further defined or extended through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty for various goods.
Key Provisions
The key provisions of the Customs Act 1901, as referenced in Tariff Concession Instrument No. 1041007, focus on the establishment of Tariff Concession Orders (TCOs) which can lower the rate of customs duty on specific goods. Section 269F allows individuals to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which excludes certain goods from TCO eligibility. For an application to meet the core criteria (section 269C), it must be established that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
The obligations imposed by the Act on the CEO are significant. Once an application is deemed valid and meets the core criteria, the CEO must issue a written TCO, specifying the goods and the reduced rate of duty applicable (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any objections to the TCO within a reasonable timeframe (subsection 269K(1)). In the case of TCO No. 1041007, Filter Tex Media's application for certain needle felts was accepted, and the CEO issued the order on 22 November 2010, declaring that these goods were subject to a reduced duty rate of free, as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
Failing to comply with the requirements set out in the Customs Act 1901 and its associated regulations can result in legal consequences. The Act does not specify particular offences related to the issuance of TCOs; however, any failure to follow the prescribed processes for application and publication could potentially lead to disputes or challenges in court. The penalties for non-compliance are not explicitly stated in the text, but they could include fines or other sanctions as provided under the relevant laws governing customs and duty regulations in Australia.