EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0412268
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.
Bekaert Australia Pty Ltd applied for a TCO in respect of certain viscose rayon spun yarns on 15 November 2004.
Instrument
TCO No 0412268 was made on 1 February 2005. It declares that those certain viscose rayon spun yarns 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 3%.
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. 0412268 is taken to have come into force on 15 November 2004.
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 Commonwealth Parliament, establishes a framework for the administration of customs and excise duties, and includes provisions for the creation of Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0412268, enacted on 1 February 2005, applies this scheme to certain viscose rayon spun yarns, reducing their duty from the general rate of 5% to 3%. This instrument was introduced in response to an application by Bekaert Australia Pty Ltd, and the Chief Executive Officer of Customs was satisfied that the application met the core criteria as no substitutable goods were produced in Australia. The TCO came into effect on the date the application was lodged, 15 November 2004, and it benefits importers by allowing them to apply for a refund of duty on goods imported since that date.
Scope and Application
The Tariff Concession Instrument No. 0412268, made under Part XVA of the Customs Act 1901, applies to the application process for Tariff Concession Orders (TCOs) concerning certain viscose rayon spun yarns. Specifically, it targets entities like Bekaert Australia Pty Ltd that apply for reduced customs duty rates on specified goods. The application process is overseen by the Chief Executive Officer of Customs (CEO), who assesses whether the goods in question meet the core criteria for a concession, such as the absence of substitutable goods produced in Australia. Once a TCO is issued, it affects the customs duty rates on the specified goods, with the CEO determining the applicable duty rate from the Customs Tariff Act 1995. The TCO applies nationally within Australia and does not disadvantage any person other than the Commonwealth by affecting rights as they existed before the registration of the TCO. Importantly, the TCO does not impose any liabilities on any person, and importers may benefit by applying for a refund of duty on goods imported since the TCO took effect. The Act allows for further specification and regulation of the TCO process through subordinate instruments.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0412268 (the Instrument) under the Customs Act 1901 are sections 269C, 269P, and 269S. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) application to be successful, requiring that no substitutable goods are produced in Australia in the ordinary course of business. Section 269P mandates that if these criteria are met, the Chief Executive Officer of Customs (the CEO) must issue a TCO. Section 269S stipulates that the TCO is deemed to have come into effect on the day the application was lodged. In this instance, the Instrument declares that certain viscose rayon spun yarns are subject to a lower rate of customs duty under the Customs Tariff Act 1995.
The Act imposes specific obligations on the CEO when handling a TCO application. Upon receiving a valid application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be granted (subsection 269K(1)). The CEO must then assess the application against the core criteria outlined in section 269C, ensuring that no substitutable goods are being produced in Australia. If satisfied, the CEO must issue a TCO as specified in section 269P(3). Additionally, the CEO must ensure that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, particularly concerning any actions or omissions prior to the TCO's registration (subsection 269S(1)).
Breaching the requirements set forth in the Customs Act 1901 can lead to various consequences. The Act does not explicitly outline specific offences or penalties for failing to comply with the provisions of a TCO. However, non-compliance with the Act's requirements regarding customs duties and the administration of TCOs could potentially result in civil or criminal penalties, depending on the nature and severity of the breach. For example, incorrect declaration of goods or fraudulent claims could lead to fines or other penalties as provided under the relevant customs legislation. The precise penalties would depend on the specific circumstances of any breach.