EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513454
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 0513454 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. 0513454 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. 0513454 was enacted in 2005 under the Customs Act 1901, establishing a scheme for Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specific goods. This legislative instrument was introduced to address the need for a streamlined process to apply for tariff concessions, ensuring that the application criteria and decision-making process are transparent and accessible. The Chief Executive Officer of Customs is responsible for determining whether an application for a TCO meets the core criteria, including the absence of substitutable goods produced in Australia. The policy objective of this Act is to facilitate the import of goods by reducing customs duty rates, thereby encouraging trade and benefiting importers by potentially allowing them to claim refunds of duty paid on goods imported since the TCO came into effect.
Scope and Application
The Tariff Concession Instrument No. 0513454 under the Customs Act 1901 applies to entities seeking tariff concessions on imported goods, specifically in this case, DPK Australia Pty Ltd's application for certain Mercerised Cotton Yarn. The instrument facilitates the application of a lower rate of customs duty on these goods, as stipulated in the Customs Tariff Act 1995. The scope of this legislation pertains to the import of goods where no substitutable products are produced domestically, ensuring that local industries are not unfairly disadvantaged. The instrument is issued by the Chief Executive Officer of Customs and is governed under section 269F of the Customs Act 1901, which outlines the conditions and criteria for tariff concessions. The application process requires publication in the Gazette to allow for any objections, although none were received for this specific instrument. The geographic reach of this legislation is national, affecting all entities importing the specified goods into Australia. The instrument does not impose any liabilities on individuals or entities and does not affect existing rights or liabilities accrued before its registration, providing clarity and protection for both the Commonwealth and importers.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0513454 under the Customs Act 1901 (section 269F) detail the process for applying for a Tariff Concession Order (TCO). An applicant, such as DPK Australia Pty Ltd in this case, can apply to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods, in this instance, Mercerised Cotton Yarn. If the CEO determines that the application meets the core criteria, which includes the absence of substitutable goods produced in Australia (section 269C), the CEO must issue a written order, a TCO, specifying the reduced customs duty applicable to the goods (section 269P(3)). In this case, the TCO declares that the goods are subject to a duty rate of 0% instead of the general rate of 5%.
The obligations under the Act for the parties involved are primarily focused on the application and review process. The CEO must ensure that the application for a TCO is considered against the core criteria and must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties. DPK Australia Pty Ltd must provide all necessary information and evidence to support their application, ensuring that the goods in question are not substitutable by any Australian-produced goods.
Failure to comply with the requirements of the Act can result in various consequences. While the Explanatory Statement does not detail specific offences or penalties, the Act generally provides for civil and criminal penalties for breaches. Civil penalties can include fines, and in more severe cases, criminal penalties can apply, including imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined based on the specific provisions of the Customs Act 1901 and any related regulations. It is crucial for all parties to adhere to the legislative requirements to avoid these potential consequences.