EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048555
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.
Great Western Floors Pty Ltd applied for a TCO in respect of certain unprinted nylon mats on 1 November 2010.
Instrument
TCO No 1048555 was made on 11 March 2011. It declares that those certain unprinted nylon mats 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. 1048555 is taken to have come into force on 1 November 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, establishes a framework for the imposition and remission of customs duties, among other things. To address the need for tariff concessions for specific imported goods, the Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism was introduced to ensure that the Australian market is supplied with goods that cannot be produced domestically, thereby facilitating trade and supporting economic efficiency. The explanatory statement for Tariff Concession Instrument No. 1048555 clarifies the process by which the CEO evaluates and approves applications for TCOs, ensuring that the concessions are granted in accordance with the legislative criteria. This particular TCO, issued on 11 March 2011, pertains to certain unprinted nylon mats and reduces their duty from 5% to free, effective from 1 November 2010.
Scope and Application
The Tariff Concession Instrument No. 1048555 under the Customs Act 1901 applies to specific unprinted nylon mats as declared by the Chief Executive Officer of Customs. The instrument was enacted to provide tariff concessions for these goods, reducing the customs duty from the general rate of 5% to free of charge. This concession applies to goods that are the subject of the application made by Great Western Floors Pty Ltd on 1 November 2010. The application was successful as the CEO was satisfied that no substitutable goods were produced in Australia, fulfilling the core criteria set out in section 269C of the Act. The instrument is effective from the date the application was lodged, as per subsection 269S(1) of the Act, and does not disadvantage any person or impose liabilities for actions taken prior to the registration date. This concession aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date.
Key Provisions
The Customs Act 1901 (the Act) includes provisions that allow for the establishment of Tariff Concession Orders (TCOs) through section 269F (1) and section 269C, which sets out the core criteria that must be satisfied for a TCO application to be approved. If a person applies for a TCO under section 269F, the Chief Executive Officer of Customs (the CEO) must determine whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order, declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a reduced duty rate or even duty-free status (section 269P(3)). For example, in the case of Great Western Floors Pty Ltd, a TCO was granted for certain unprinted nylon mats, reducing the duty from 5% to free (Tariff Concession Instrument No. 1048555).
The Act imposes several obligations on the parties involved. For applicants, the primary obligation is to ensure that their application for a TCO is made in accordance with the requirements of section 269F and that it satisfies the core criteria specified in section 269C. The CEO, on the other hand, must review the application, determine if it meets the criteria, and make a written order if satisfied (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). The TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person (subsection 269S(1)).
Breaching the conditions or requirements set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not detail specific offences or penalties related to the TCO process itself, general provisions within the Customs Act and related legislation may apply. For example, providing false information in an application could potentially be subject to penalties under the general false statements provisions of the Act, which could include fines or imprisonment. Furthermore, any actions that contravene the terms of the TCO, such as attempting to import goods not eligible for the concession, could lead to the imposition of duties as if the TCO did not apply, along with potential fines or other penalties under the Customs Act.
In summary, the key provisions of the Customs Act 1901 as they relate to Tariff Concession Orders involve the application process, the core criteria that must be met, and the obligations of both applicants and the CEO. Failure to comply with the requirements or breaching the conditions of the TCO can result in various penalties, although specific penalties are not detailed in the explanatory statement.