EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509812
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.
Stretchtex International Pty Ltd T/As Far & Wide Pty Ltd applied for a TCO in respect of certain continuous multi filament polyester yarn on 25 July 2005.
Instrument
TCO No 0509812 was made on 14 October 2005. It declares that those certain continuous multi filament polyester 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. 0509812 is taken to have come into force on 25 July 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. 0509812 was enacted in 2005 as part of the Customs Act 1901, aiming to address the issue of ensuring that certain goods, in this case specific continuous multi filament polyester yarns, receive preferential treatment in terms of customs duty. The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can be applied for by interested parties and must meet specific criteria before being granted. In this instance, Stretchtex International Pty Ltd T/As Far & Wide Pty Ltd successfully applied for a TCO on 25 July 2005, which was subsequently granted by the CEO on 14 October 2005, thereby applying a zero rate of duty to the specified goods. The CEO's decision was based on the fact that no substitutable goods were produced in Australia at the time of the application, satisfying the core criteria outlined in the Act. The TCO was designed to enhance the competitive position of Australian businesses by reducing the cost of importing specific goods, ultimately benefiting importers and the broader market.
Scope and Application
The Tariff Concession Instrument No. 0509812, issued under the Customs Act 1901, applies to continuous multi filament polyester yarns as specified in the instrument, providing a lower rate of customs duty for these goods. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when an applicant demonstrates that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The application process involves satisfying the core criteria as outlined in section 269C of the Act, which mandates that no substitutable goods are produced domestically. Upon meeting these criteria, the CEO issues a written TCO, as seen in this case where the rate of duty for the specified yarns was set to free, differing from the general rate of 5%. The application of the TCO is effective from the date the application was lodged, ensuring that any imports of the specified goods prior to the official issuance date are not disadvantaged. This process is governed nationally, extending across all jurisdictions within Australia. No exclusions or exemptions are specifically stated beyond the conditions required to qualify for a TCO under the Act, and the scope of the legislation is further defined through subordinate instruments such as the Customs Tariff Act 1995 and related regulations.
Key Provisions
The primary operative sections of this legislation include section 269F, which allows for the application of a Tariff Concession Order (TCO) by a person to the Chief Executive Officer (CEO) of Customs. Section 269C sets out the core criteria that must be satisfied for a TCO application to be considered. Specifically, it requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B further defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the CEO is satisfied that the application meets the core criteria, they must make a written order, which is the TCO, under section 269P(3). In this specific case, Tariff Concession Order No. 0509812 was made on 14 October 2005, and it declared that certain continuous multi filament polyester yarns are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations on the CEO of Customs, including the requirement to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. This is outlined in subsection 269K(1). In this instance, no submissions were received in response to the published notice. Additionally, subsection 269S(1) stipulates 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. 0509812 is deemed to have come into force on 25 July 2005.
Breaching the provisions of this Act can result in various penalties and consequences. While the specific legislative text does not detail explicit penalties for non-compliance, it is understood that failure to adhere to the conditions set out for TCOs could lead to the revocation of the concession or other administrative actions taken by Customs. Moreover, any person found to be misusing the TCO provisions or engaging in fraudulent activities related to customs duties could face more severe legal repercussions, including fines and imprisonment, as provided under the broader framework of the Customs Act 1901 and associated regulations.