EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513352
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 waxed, ring spun, combed cotton, single ply yarn on 30 September 2005.
Instrument
TCO No 0513352 was made on 23 December 2005. It declares that those certain waxed, ring spun, combed cotton, single ply 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.0513352 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, enacted by the Australian Parliament, provides a framework for the regulation of customs duties. This Act allows for the establishment of Tariff Concession Orders (TCOs) under Part XVA, which enable the Chief Executive Officer of Customs to grant tariff concessions on certain goods. These concessions apply when the goods are not produced in Australia and there are no substitutable goods produced domestically, ensuring that local industries are not unduly disadvantaged. The introduction of this mechanism aimed to address gaps in the customs duty system by providing a more flexible approach to tariff management that can respond to the specific economic needs of industries or sectors. The policy objective is to support Australian businesses by reducing the cost of imported goods, thereby potentially increasing their competitiveness and encouraging economic growth.
Scope and Application
The Tariff Concession Instrument No. 0513352 under the Customs Act 1901 applies to the specific goods in question, namely certain waxed, ring spun, combed cotton, single ply yarns, which have been declared eligible for tariff concessions by the Chief Executive Officer of Customs. This legislation is applicable to the entity that made the application, DPK Australia Pty Ltd, and to any other entities or persons involved in the importation of these goods. The scope of the Act extends to the conduct and transactions relating to the importation of these specified goods into Australia. The instrument operates nationally as it pertains to the application and enforcement of the Customs Act 1901 across the Commonwealth of Australia. The Act excludes goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. The instrument itself does not create any additional exclusions beyond those provided for in the primary Act. Any further details or modifications to the application of the Act can be made through subordinate instruments, which would be consistent with the provisions outlined in the Customs Act 1901.
Key Provisions
The Tariff Concession Order No. 0513352 under the Customs Act 1901 (section 269F) grants a tariff concession on certain waxed, ring spun, combed cotton, single ply yarns. This concession was made on 23 December 2005 and is applicable from the date the application was lodged, 30 September 2005 (subsection 269S(1)). The order applies a duty rate of free on these specified yarns, which contrasts with the general rate of duty of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations under this Act require that any person who wishes to apply for a tariff concession must do so in writing to the Chief Executive Officer of Customs (CEO) and must ensure that the application is not for goods specified in section 269SJ of the Act, which are ineligible for such concessions. The CEO must then evaluate the application against the core criteria set out in section 269C of the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This involves understanding the definitions of "goods produced in Australia" (section 269D), "ordinary course of business" (section 269E), and "substitutable goods" (section 269F).
Should the CEO determine that the application meets the core criteria, they are obligated to make a written order, a Tariff Concession Order, which officially declares that the specified goods are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting any person who may object to the concession to lodge a submission (subsection 269K(1)). In this instance, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 may result in various civil or criminal consequences. For example, if an entity submits an ineligible application or provides false information, they may face penalties under section 285A of the Act, which includes fines up to 10,000 penalty units or imprisonment for up to five years, or both, for serious breaches. Additionally, any person who fails to adhere to the terms of the Tariff Concession Order may be subject to the general penalties for non-compliance with the Customs Act, which can include fines and imprisonment.