EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508476
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 Viscose Rayon Yarn on 30 June 2005.
Instrument
TCO No 0508476 was made on 9 September 2005. It declares that those certain Viscose Rayon Yarn 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 0%.
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. 0508476 is taken to have come into force on 30 June 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 Tariff Concession Instrument No. 0508476, enacted under the Customs Act 1901, addresses the need for tariff concessions to lower the customs duty on specific goods, enhancing competitiveness and trade efficiency. The instrument was introduced to facilitate the application of reduced duty rates for certain Viscose Rayon Yarn, as requested by Standard Knitting Mills Pty Ltd, provided that no substitutable goods were produced in Australia. The instrument was developed by the Chief Executive Officer of Customs (CEO), who ensures the application meets the core criteria stipulated in the Customs Act 1901. The policy objective is to support domestic industries by reducing import costs and thereby promoting trade and economic growth. The instrument was published in the Gazette, inviting public submissions, none of which were received. The tariff concession became effective from the date the application was lodged, which is 30 June 2005, and it does not disadvantage any person or impose liabilities on them for actions taken before its registration.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders are applicable to goods that meet specific criteria, primarily ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The Act applies to individuals or entities seeking to import goods that can benefit from reduced customs duties as specified in the TCOs. The scope of this legislation is national, operating under the authority of the Commonwealth of Australia. The application of TCOs is subject to certain exclusions, particularly regarding goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of TCOs can be extended or restricted through subordinate instruments, which may provide further definitions or conditions necessary for the implementation of the concessions. The commencement of TCO No. 0508476, which applies to certain Viscose Rayon Yarn, is effective from 30 June 2005, the date the application was lodged, and it provides a 0% duty rate on these goods, down from the general rate of 5%. This order does not disadvantage any person or impose liabilities on anyone in respect of actions taken prior to its registration.
Key Provisions
The key operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0508476, revolve around the creation and implementation of Tariff Concession Orders (TCOs). Section 269F allows for the application for a TCO in respect of goods, while Section 269C establishes the criteria that must be met for the application to proceed. Specifically, Section 269C requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If these criteria are met, the Chief Executive Officer of Customs (CEO) is mandated under Section 269P(3) to issue a written TCO.
The obligations imposed by the Act on the parties it governs are primarily centered on the application and assessment processes for TCOs. The CEO must ensure that all TCO applications are assessed against the core criteria stipulated in Section 269C. Furthermore, under Section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 0508476, the CEO received no submissions, indicating a general acceptance of the application's merits. Additionally, Section 126(1)(r) of the Regulations allows importers of the affected goods to apply for a refund of duty on goods imported since the TCO is taken to have come into force.
The Act outlines specific consequences for breaches of its provisions, although the Explanatory Statement does not detail maximum penalties. Generally, under the Customs Act, breaches can lead to a range of civil and criminal consequences. Civil penalties may include financial penalties and the forfeiture of goods, while criminal penalties could involve fines and imprisonment, depending on the severity of the breach. It is important for all parties governed by the Act to comply with its requirements to avoid these potential consequences.