EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504571
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.
Standard Knitting Mills Pty Ltd applied for a TCO in respect of certain knitting yarns on 22 April 2005.
Instrument
TCO No 0504571 was made on 09 September 2005. It declares that those certain knitting 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 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. 0504571 is taken to have come into force on 22 April 2005.
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 provide for the regulation of customs and excise duties, and it includes provisions for making Tariff Concession Orders (TCOs). The Act, particularly under Part XVA, allows the Chief Executive Officer of Customs to issue TCOs that reduce or eliminate customs duty on certain goods, provided that specific criteria are met. One such criterion is that no substitutable goods must be produced in Australia in the ordinary course of business. This legislative framework was designed to address economic and trade policy objectives by facilitating the importation of goods that are not locally produced, thus potentially lowering costs for businesses and consumers and encouraging international trade.
Tariff Concession Instrument No. 0504571, made under the Customs Act 1901, provides a practical example of this legislative process. In this case, Standard Knitting Mills Pty Ltd applied for a TCO concerning certain knitting yarns, and after assessing that no substitutable goods were being produced in Australia, the CEO issued the TCO, resulting in a free rate of duty on these goods instead of the general rate of 5%. This process highlights the Act's role in supporting specific industries by reducing import costs and potentially stimulating economic activity.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the legislative framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to goods for which an application has been made and approved by the CEO, provided the goods are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The Act applies to any person or entity that seeks a tariff concession for specific goods, provided that the goods in question are not substitutable by products already produced in Australia. The geographic scope of the Act is national, as it pertains to the importation of goods into Australia and the application of customs duties as prescribed by the Customs Tariff Act 1995. The application of a TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the order's registration. The CEO is mandated to publish notices in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. The TCO in question, No. 0504571, was made in relation to certain knitting yarns, effective from the date the application was lodged, which is 22 April 2005.
Key Provisions
The Tariff Concession Instrument No. 0504571 pertains to the Customs Act 1901 and specifically concerns Tariff Concession Orders (TCOs) (s 269F). An application for a TCO can be made by a person to the Chief Executive Officer of Customs (the CEO) (s 269F). If the CEO determines that the application pertains to goods not specified in section 269SJ and meets the core criteria (s 269C), they are required to issue a written order (a TCO) (s 269P(3)). This order specifies that the goods in question are subject to a prescribed tariff item in Schedule 4 to the Customs Tariff Act 1995, thus attracting a lower rate of duty.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO does not relate to goods specified in section 269SJ (s 269SJ). The applicant must provide sufficient evidence to satisfy the CEO that the goods in question meet the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business (s 269C). Upon accepting a TCO application as valid, the CEO must promptly publish a notice in the Gazette, inviting any interested party to submit reasons why the TCO should not be granted (s 269K(1)).
Non-compliance with the provisions of the Customs Act 1901 may lead to various consequences. If a person fails to adhere to the requirements for a TCO, such as submitting a false application or providing misleading information, they may be subject to penalties under the Customs Act. The penalties for providing false or misleading information can include fines and, in severe cases, imprisonment. The exact penalties are not specified in the Explanatory Statement, but they are generally aligned with the severity of the breach and the impact on customs revenue.
In summary, the Tariff Concession Instrument No. 0504571 provides a framework for reducing customs duties on specific goods through Tariff Concession Orders. The Act sets out the process for applying for and granting TCOs, imposes obligations on the CEO and applicants, and outlines potential penalties for non-compliance. This mechanism aims to benefit importers by lowering the duty on certain goods, provided they meet the criteria set out in the Act.