EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114828
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 fabric on 11 May 2011.
Instrument
TCO No 1114828 was made on 08 August 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. 1114828 is taken to have come into force on 11 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, including the imposition and collection of customs duties. The Act provides a framework for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. The problem or gap addressed by the TCOs scheme is to provide relief to industries or sectors that may be at a competitive disadvantage due to the absence of locally produced substitutable goods. The policy objective is to support domestic industries by reducing the cost of imported goods, thereby promoting fair competition and economic growth. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make TCOs upon meeting specific criteria, such as the absence of substitutable goods produced in Australia. This instrument ensures that the rights of importers are preserved and that no one is disadvantaged by the concessions provided.
Scope and Application
The Tariff Concession Instrument No. 1114828 applies to goods that are the subject of a Tariff Concession Order (TCO) under the Customs Act 1901. Specifically, it pertains to the certain fabric for which Ontex NV applied for a TCO on 11 May 2011. The Act allows for the reduction or waiver of customs duty on goods if certain criteria are met, in this case, the absence of substitutable goods produced in Australia. The TCO applies to the fabric in question and declares that it is subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%. The scope of this legislation is limited to the particular goods specified in the TCO and does not extend to other goods or industries unless they meet the specified criteria for a TCO. The application of this TCO is national in reach, applying throughout Australia, and it does not impose any liabilities on any person, ensuring that the rights of importers are beneficially affected.
Key Provisions
The Tariff Concession Instrument No. 1114828, made under the Customs Act 1901, applies to certain fabric, reducing the duty on these goods from the general rate of 5% to free duty. This instrument was made following an application by Ontex NV on 11 May 2011, which was subsequently accepted by the Chief Executive Officer of Customs (CEO) on 8 August 2011 (sections 269F, 269P(3)). This instrument is effective from the date the application was lodged, 11 May 2011 (subsection 269S(1)).
The obligations under this Act require that any person seeking a tariff concession order must apply to the CEO and meet the core criteria set out in the Act. Specifically, the applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (sections 269C, 269SJ). In this case, the CEO was satisfied that the application met these criteria, as there were no substitutable goods produced in Australia for the fabric in question. Once the CEO is satisfied, they are required to make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)).
The CEO must also publish a notice in the Gazette, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received. Additionally, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of this Tariff Concession Instrument. However, any breach of the Customs Act 1901 or the Customs Tariff Act 1995, which govern the operation of TCOs, may result in penalties as prescribed under those Acts. The severity of these penalties would depend on the specific breach and the relevant provisions of the Acts.