EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055677
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 Pty Ltd applied for a TCO in respect of certain needle felt on 22 December 2010.
Instrument
TCO No 1055677 was made on 16 March 2011. It declares that those certain needle felt 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. 1055677 is taken to have come into force on 22 December 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, establishes a framework for administering customs duties and related regulations. Among its provisions, Part XVA of the Act facilitates the implementation of Tariff Concession Orders (TCOs), which can reduce the customs duty on specific goods when applied for and approved by the Chief Executive Officer of Customs (CEO). The 2011 Tariff Concession Instrument No. 1055677 exemplifies this mechanism, addressing the gap in tariff concessions for certain needle felt products imported into Australia. The instrument was introduced to provide relief to importers of these goods by reducing the applicable duty from the general rate of 5% to free, contingent upon the CEO's determination that no substitutable goods were produced in Australia at the time of the application. The objective is to support import activities and potentially enhance economic efficiency by lowering costs for businesses importing these goods.
Scope and Application
The Tariff Concession Instrument No. 1055677 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO). This instrument was made in response to an application by Filter-Tex Media Pty Ltd for a TCO concerning certain needle felt, and it became effective on 22 December 2010, the date the application was lodged. The Act allows for the CEO of Customs to issue a TCO if they are satisfied that no substitutable goods are produced in Australia, thereby permitting a lower rate of customs duty on the specified goods. In this instance, the CEO determined that no such substitutable goods were being produced in Australia for the needle felt in question, leading to the issuance of the TCO which sets the duty rate at free, as opposed to the general rate of 5%. The TCO does not retroactively affect the rights of any person other than the Commonwealth and does not impose any new liabilities on any person, although it does entitle importers to apply for a refund of duties paid on the goods since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation pertain to the process of applying for and making a Tariff Concession Order (TCO) under the Customs Act 1901 (section 269F). If an applicant meets the core criteria, the Chief Executive Officer of Customs (CEO) must make a written order (section 269P(3)). In this instance, TCO No. 1055677 was made on 16 March 2011, and it declares that certain needle felt are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). The CEO must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). The TCO is taken to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)).
The Customs Act 1901 imposes specific obligations on the CEO when considering a TCO application. The CEO must ensure 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. If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties and must consider any submissions received (subsection 269K(1)).
Under this legislation, there are no explicit offences or penalties for breach. However, the Act does outline the consequences of failing to meet the core criteria for a TCO application. If the CEO determines that the application does not meet the core criteria, they are not required to make a TCO. The applicant may seek a review of the CEO’s decision under the Administrative Appeals Tribunal Act 1975. In terms of civil consequences, the TCO provides tariff concessions to importers, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any liabilities on any person (subsection 269S(2)).