EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1110460
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.
Ontex NV applied for a TCO in respect of certain elastic strip laminate fabric on 25 March 2011.
Instrument
TCO No 1110460 was made on 20 June 2011. It declares that those certain elastic strip laminate fabric 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. 1110460 is taken to have come into force on 25 March 2011.
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 was enacted by the Commonwealth Parliament to regulate the import and export of goods in Australia, providing a framework for customs duties and other charges. The Act was introduced to address the need for a structured and efficient system of customs and border control. One particular feature of the Customs Act is the provision for Tariff Concession Orders (TCOs), which allow for reduced customs duties on specific goods under certain conditions. This is particularly relevant under Part XVA of the Act, which empowers the Chief Executive Officer of Customs to make such orders. The primary policy objective of the Tariff Concession Instrument No. 1110460, issued under this authority, is to ensure that Australian industries can remain competitive by providing tariff relief on goods that are not domestically produced. The instrument was introduced to provide relief to importers of certain elastic strip laminate fabric, aligning with the Act's aim to facilitate trade while protecting local industries where necessary.
Scope and Application
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to certain goods. The legislation applies to individuals or entities seeking a tariff concession for goods imported into Australia, provided the goods do not fall under the exclusions specified in section 269SJ. The TCO process mandates that no substitutable goods, which are defined as those produced in Australia and suitable for the same use as the imported goods, must be in production in the ordinary course of business in Australia. The scope of the Act is national, affecting all importers and importers' rights under the Commonwealth jurisdiction. Any person may object to a TCO application, but in this instance, no objections were received. The TCO No. 1110460, made on 20 June 2011, applies to certain elastic strip laminate fabric, reducing the duty rate from 5% to free, and this TCO came into effect on 25 March 2011, the date of application. The TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth, and it allows importers to claim refunds for duties paid on imports since the TCO's effective date.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which provide the framework for the making of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and does not pertain to goods specified in section 269SJ, they must then determine whether the application meets the core criteria outlined in section 269C. If the application meets these criteria, the CEO must issue a written order declaring that the goods in question are subject to a lower rate of customs duty as specified in Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. The CEO must assess whether the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have objections to the making of the TCO. If no objections are received, the CEO must proceed to make the TCO. The Act also stipulates that a TCO comes into force on the day the application was lodged, which in this case was 25 March 2011 for TCO No. 1110460.
Breaching the requirements set forth by the Customs Act 1901 can lead to various civil and criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, it is clear that any failure to comply with the provisions for making a TCO could result in legal ramifications. Typically, under Australian law, such breaches might involve fines or other penalties as stipulated in relevant sections of the Act or other applicable legislation. The exact penalties would depend on the nature and severity of the breach.
In summary, the Customs Act 1901, particularly sections 269C, 269F, and 269P, governs the process for issuing TCOs, ensuring that eligible goods are subject to reduced customs duty rates. The CEO's role includes evaluating applications, publishing notices for public submissions, and making TCOs if no valid objections are received. Failure to comply with these provisions may lead to legal consequences, although specific penalties are not detailed in the provided explanatory statement.