EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513450
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 micro modal, waxed, ring spun, single ply yarn on 30 September 2005.
Instrument
TCO No 0513450 was made on 23 December 2005. It declares that those certain micro modal, waxed, ring spun, 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.0513450 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, establishes a framework for the regulation of customs duties and other charges. This legislation was introduced to address the need for streamlined and efficient processes in managing international trade, ensuring that customs duties are applied correctly and fairly. Under this Act, the Chief Executive Officer of Customs has the authority to issue Tariff Concession Orders (TCOs), which can reduce or eliminate customs duties on specific goods, provided certain criteria are met. The explanatory statement for Tariff Concession Instrument No. 0513450, made in 2005, illustrates this process. DPK Australia Pty Ltd applied for a TCO for certain micro modal yarns, and after a review, the CEO determined that these goods were not being produced in Australia and thus met the core criteria. As a result, a TCO was issued, granting duty-free treatment to these yarns. This legislative mechanism aims to support Australian businesses by making imported goods more competitive, thereby encouraging trade and economic growth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for issuing Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to specified goods. This legislation allows for applications to the Chief Executive Officer of Customs (CEO) to reduce the duty on goods, provided that no substitutable goods are being produced in Australia. The CEO's decision to grant a TCO hinges on the applicant meeting the core criteria, notably the absence of Australian-produced substitutable goods. The Act further clarifies terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' through specific sections. Once a TCO is issued, it applies retroactively to the date the application was lodged, and while it does not affect the rights of any person as of the registration date, it allows for duty refunds for importers of the specified goods from the effective date of the TCO. The CEO must also publish notices in the Gazette inviting objections to the TCO, although in the case of TCO No 0513450, no objections were received.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs). Section 269F of the Act allows a person to apply to the CEO for a TCO on specific goods, provided these goods are not listed in section 269SJ, which enumerates items ineligible for TCOs. For an application to be considered, it must meet the core criteria outlined in section 269C, which includes ensuring that no substitutable goods are produced in Australia at the time the application is made. The terms 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are further defined in sections 269D, 269E, and 269F of the Act. If the CEO determines that the application satisfies these criteria, they must issue a written TCO under section 269P(3).
The obligations imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that the application is made in accordance with the Act's requirements and that the goods specified in the application are not subject to any disqualifications. The CEO has a duty to publish a notice in the Gazette inviting submissions from interested parties once an application is deemed valid under section 269K(1). This notice should include an invitation for any person who believes the TCO should not be granted to lodge a submission. The CEO must then consider any submissions received and decide whether to proceed with the TCO. In the case of TCO No. 0513450, DPK Australia Pty Ltd applied for a concession on certain micro modal yarns, and no submissions were received, leading the CEO to grant the TCO.
Breaches of the provisions under the Customs Act 1901 can result in civil and criminal penalties. Under section 284 of the Act, individuals or entities found guilty of knowingly making a false statement or representation in an application for a TCO may face a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, the CEO has the authority to impose administrative penalties for non-compliance with the Act's requirements. These penalties can include fines and, in severe cases, legal action to enforce compliance or recover unpaid duties.