EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513348
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.
DPK Australia Pty Ltd applied for a TCO in respect of certain nylon yarn on 30 September 2005.
Instrument
TCO No 0513348 was made on 23 December 2005. It declares that those certain nylon 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. 0513348 is taken to have come into force on 30 September 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 to regulate the import and export of goods in Australia, providing the legal framework for customs duties and related activities. In particular, Part XVA of the Act, which was introduced to address the need for tariff concessions to promote economic efficiency and trade, allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs). These orders can lower the customs duty on specific goods, provided certain criteria are met. The explanatory statement for Instrument No. 0513348, made under the Customs Act, details the process for granting such a concession, specifically for certain nylon yarns. The concession was made to DPK Australia Pty Ltd on 23 December 2005, after the CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria set out in section 269C of the Act. The primary objective of this instrument, as with others under the Act, is to ensure that the rights and interests of all parties are protected while facilitating smoother trade processes.
Scope and Application
The Tariff Concession Instrument No. 0513348 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO), which in this case are certain nylon yarns. The Act permits the Chief Executive Officer of Customs to grant these concessions, provided that the application meets the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business. This concession applies to the goods specified in the order and provides a reduced rate of customs duty, in this instance making it free of charge. The geographic reach of this Act is national, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The application process for a TCO is open to any person, but the concessions do not disadvantage or impose liabilities on any person other than the Commonwealth. The Act also provides for the possibility of subordinate instruments to further extend or specify the application of the TCOs, although in this instance, no submissions were received in response to the published notice inviting objections.
Key Provisions
The Tariff Concession Order (TCO) No. 0513348, under the Customs Act 1901, applies to certain nylon yarns and designates them as goods that benefit from a reduced customs duty rate. The general duty rate for these goods is 5%, but the TCO stipulates a duty-free rate for the specified nylon yarns (Section 269P(3)). This concession is contingent upon the Chief Executive Officer of Customs (CEO) determining that no substitutable goods were produced in Australia on the date the TCO application was lodged, aligning with the criteria set out in sections 269C and 269D of the Act.
The obligations imposed by the Act on entities such as DPK Australia Pty Ltd, who applied for the TCO, include ensuring that their applications are lodged in accordance with the statutory requirements and that they provide all necessary information to substantiate their claim that no substitutable goods were produced in Australia. The CEO must then assess the application against these criteria and, if satisfied, issue a written order that specifies the goods and the reduced duty rate applicable under the Customs Tariff Act 1995 (Schedule 4, item 50).
Upon the publication of the TCO in the Gazette, as mandated by subsection 269K(1) of the Act, any interested party has the opportunity to submit objections or reasons why the TCO should not proceed. However, in this case, the CEO did not receive any submissions, facilitating the swift implementation of the TCO. The TCO is deemed to have come into force on the date the application was lodged, 30 September 2005 (subsection 269S(1)). It is important to note that the TCO does not retroactively affect the rights or liabilities of any party other than the Commonwealth, ensuring that it only benefits importers from the date of registration onwards.
Failure to comply with the provisions of the Customs Act 1901, including the submission of false information in an application for a TCO, may result in civil or criminal penalties. Although the specific penalties for breaches are not detailed in the explanatory statement, general provisions of the Act and related legislation typically include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as outlined in the broader legislative framework.