EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513452
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 Mercerised Cotton Yarn on 30 September 2005.
Instrument
TCO No 0513452 was made on 23 December 2005. It declares that those certain Mercerised Cotton 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. 0513452 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 Tariff Concession Instrument No. 0513452, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods, thereby facilitating more competitive pricing and potentially enhancing economic activity. The instrument was introduced to provide relief from customs duties on certain goods, such as Mercerised Cotton Yarn, by the Chief Executive Officer of Customs, provided that no substitutable goods are produced in Australia. The policy objective behind this initiative is to support Australian businesses by reducing the cost of imported goods, thereby making them more competitive in the domestic market. The Customs Act 1901, enacted by the Australian Parliament, provides the legislative framework for the administration of customs and excise, and the Tariff Concession Orders are a mechanism to ensure that certain imported goods are subject to preferential duty rates. This instrument aims to benefit importers by potentially reducing their duty liabilities and ensuring that the rights of all stakeholders are protected without imposing any new liabilities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides the framework for Tariff Concession Orders (TCOs) which can be applied for by any person to the Chief Executive Officer of Customs (CEO). The application process involves the CEO assessing whether the application meets core criteria, notably by verifying that no substitutable goods are produced in Australia at the time of application. If satisfied, the CEO issues a TCO, which applies to specific goods, resulting in a lower rate of customs duty for those goods. This Act applies to all goods that are the subject of a TCO application and extends across the Commonwealth of Australia, impacting the import duties on the specified goods. The Act does not apply to goods specified in section 269SJ, which are ineligible for tariff concessions. The TCO does not disadvantage any person by affecting rights or imposing liabilities for actions prior to the TCO's effective date, which aligns with the date the application was lodged. This legislative mechanism allows for tariff adjustments on an ad-hoc basis, thereby influencing import costs and potentially encouraging certain imports by reducing their duty burden.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) concerning Tariff Concession Orders (TCOs) are sections 269F, 269C, and 269P. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO for goods. Once an application is accepted as valid, the CEO must decide if it meets the core criteria outlined in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P (3), declaring the goods to which the TCO applies. This specific TCO, number 0513452, was made on 23 December 2005 for certain Mercerised Cotton Yarn, declaring that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a zero per cent duty rate.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application is valid and not in respect of goods specified in section 269SJ of the Act. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, no submissions were received in response to the published notice. Furthermore, the Act requires that a TCO is to be taken to have come into force on the day the application for the TCO was lodged, which in this instance was 30 September 2005.
Under the Customs Act 1901, breaches of the requirements for TCOs can result in civil or criminal penalties. However, the specific offences, penalties, or civil/criminal consequences for breach of TCOs are not explicitly stated within the Act. It is important to note that any person who believes they have been adversely affected by a TCO may need to seek legal advice on potential recourse under other relevant legislation or common law principles. The Tariff Concession Orders themselves do not directly impose penalties for breach, but rather establish the conditions under which certain goods are subject to reduced customs duty rates.