EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114142
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.
Thermaguard Company applied for a TCO in respect of certain fabric on 04 May 2011.
Instrument
TCO No 1114142 was made on 25 July 2011. It declares that those certain 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. 1114142 is taken to have come into force on 04 May 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, enacted by the Australian Parliament, established a framework for the regulation of customs duties and tariffs, with a specific focus on providing tariff concession orders (TCOs) to support certain economic activities. This Act allows the Chief Executive Officer of Customs to grant tariff concessions on goods, provided that the application meets certain criteria, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 1114142, introduced in 2011, addresses the need for tariff relief for specific imported goods, in this case, certain fabric, by providing a zero-rate duty for these goods under the Customs Tariff Act 1995. This legislative measure aims to support businesses by reducing the cost of importing specific goods, thereby fostering economic activity and ensuring fair trade practices within Australia.
Scope and Application
The Tariff Concession Instrument No. 1114142 under the Customs Act 1901 applies to goods for which a Tariff Concession Order (TCO) has been granted, in this instance concerning certain fabric. The Act is applicable to any person or entity that imports the specified fabric, provided that the importation occurs after the TCO was taken to have come into force on 04 May 2011. The instrument primarily affects the importation process by allowing for a concession in the rate of customs duty for these specified goods, reducing the general rate of 5% to a rate of duty that is free. The TCO is effective across the Commonwealth of Australia, as it is an instrument made under the authority of the Customs Act 1901, which is a federal statute. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which sets out goods that cannot be subject to a TCO. The scope of the Act is further extended through subordinate instruments, which may detail additional criteria and conditions for the application and enforcement of TCOs.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1114142 under the Customs Act 1901 (section 269P(3)) detail the process by which the Chief Executive Officer of Customs (CEO) can make a Tariff Concession Order (TCO). If the CEO is satisfied that the application for a TCO meets the core criteria set out in section 269C of the Act, they must make a written order declaring that the goods specified in the application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This particular TCO, No. 1114142, was made on 25 July 2011 and declared that certain fabrics are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, any person may apply to the CEO for a TCO in respect of goods (section 269F). If the CEO accepts the application as valid, they must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their views (subsection 269K(1)). The CEO must then consider these submissions before deciding whether to make the TCO. In this instance, the CEO did not receive any submissions in response to the Gazette notice. Furthermore, the Act ensures that a TCO does not affect the rights of any person as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted before the registration date (subsection 269S(1)).
The Tariff Concession Instrument No. 1114142 does not specify any particular offences, penalties, or consequences for breaches. However, the Customs Act 1901 includes provisions that could apply more broadly. For example, knowingly or recklessly making a false statement or representation in connection with the importation of goods can result in criminal penalties, including fines and imprisonment (section 231A). Additionally, failure to comply with the Act or Regulations may result in civil penalties, such as fines, depending on the specific breach. The exact penalties would depend on the nature and severity of the breach, as outlined in the broader Customs Act 1901.