EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513453
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 filament viscose, single ply yarn on 30 September 2005.
Instrument
TCO No 0513453 was made on 23 December 2005. It declares that those certain filament viscose, 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.0513453 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 Parliament of Australia, serves as a comprehensive legislative framework governing customs duties, importation, and related matters. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This scheme was introduced to address the need for tariff concessions on certain goods, thereby facilitating trade and reducing import costs for specific items. The Tariff Concession Instrument No. 0513453, made on 23 December 2005, exemplifies this process. It was created in response to an application by DPK Australia Pty Ltd for a TCO on certain filament viscose, single ply yarn. The policy objective underpinning this instrument is to ensure that goods for which no substitutable products are produced in Australia are subject to tariff concessions, thereby encouraging import and potentially boosting industry competitiveness.
Scope and Application
The Customs Act 1901 applies to all persons and entities importing goods into Australia, with specific focus on the imposition of tariffs and the administration of tariff concessions through the issuance of Tariff Concession Orders (TCOs). These orders, as outlined in Part XVA of the Act, provide for lower rates of customs duty on specified goods, contingent on the absence of substitutable goods produced domestically in the ordinary course of business. The CEO of Customs holds the authority to make such orders, subject to the criteria set forth in the Act, and must ensure that the application does not pertain to goods explicitly excluded under section 269SJ. The Act applies across the Commonwealth and impacts industries and entities involved in the importation of the specified goods. Notably, the legislation does not impose any liabilities on individuals or entities for actions taken prior to the issuance of a TCO, ensuring that the rights of importers are advantageously affected from the date the TCO is deemed to have come into force, as per the provisions under the Regulations.
Key Provisions
The key sections of the Tariff Concession Instrument No. 0513453, made under the Customs Act 1901, primarily focus on the establishment and implementation of a Tariff Concession Order (TCO) for specific goods, in this case certain filament viscose, single ply yarn. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO. Section 269C stipulates that a TCO application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. This means that if the goods specified in the application are not produced domestically in a way that they could be used as a substitute, a TCO can be granted. Under section 269P(3), if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the specified goods are subject to a prescribed rate of duty.
The obligations imposed by this Act on the parties involved are primarily on the CEO. Once a valid TCO application is received, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the making of the TCO (subsection 269K(1)). Additionally, the CEO must determine whether the application meets the core criteria as outlined in section 269C. If satisfied, they must issue a TCO as per section 269P(3). Importers, on the other hand, must ensure that they comply with the terms of the TCO, including any refund applications for duties paid on goods imported before the TCO came into effect.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly state the penalties for breaches related to TCOs. However, general provisions within the Act concerning customs duty evasion or incorrect declarations can apply. For example, under section 233A, a person who knowingly makes a false statement or representation in relation to a customs matter can face a civil penalty of up to 10,000 penalty units or a criminal penalty of up to 20,000 penalty units, depending on the severity of the offence. Additionally, section 164 outlines criminal penalties for knowingly importing prohibited goods, which can include fines and imprisonment. These provisions underscore the importance of compliance with the terms set by the TCO and the broader customs regulations.