EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514130
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 Yarn on 13 October 2005.
Instrument
TCO No 0514130 was made on 3 January 2006. It declares that those certain 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. 0514130 is taken to have come into force on 13 October 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, facilitates the granting of Tariff Concession Orders (TCO) through its Part XVA. This legislative instrument was introduced to address the gap in providing reduced customs duty rates for specific imported goods, thereby encouraging trade and supporting industries by reducing costs. The Tariff Concession Instrument No. 0514130, made on 3 January 2006, specifically provides zero per cent duty on certain yarns, effective from 13 October 2005, the date the application was lodged. The policy objective, as articulated in the Act, is to ensure that the concession applies to goods for which no substitutable goods are produced in Australia in the ordinary course of business, thus protecting domestic industries from undue competition while allowing for tariff reductions that benefit importers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply a lower rate of customs duty on goods specified in the order, contingent on the CEO’s satisfaction that the application for the concession meets the core criteria outlined in the Act. The process involves an application by a person, review by the CEO, and publication in the Gazette for any objections, which in this instance, DPK Australia Pty Ltd’s application for a TCO on certain yarn resulted in no objections. The TCO, effective from the date of application, stipulates a zero percent duty rate on the specified yarn, compared to the general rate of five percent, and benefits importers by allowing them to apply for duty refunds from the effective date. Importantly, the TCO does not disadvantage any person or impose liabilities for actions taken before the order’s registration. The scope of this Act is broad, covering any person or entity applying for a tariff concession, with its jurisdictional reach extending across Australia, and no exclusions are specified within the text of the explanatory statement beyond those explicitly mentioned in section 269SJ of the Act.
Key Provisions
The Customs Act 1901, as amended, facilitates the application for Tariff Concession Orders (TCOs) under section 269F, allowing for a lower rate of customs duty on certain goods. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, outlined in sections 269B and 269C, they are required to make a written order, referred to as a TCO. Section 269P(3) stipulates that the CEO must declare that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For instance, TCO No. 0514130, made on 3 January 2006, applies to certain yarn, specifying that it is subject to item 50 of the Customs Tariff, resulting in a 0% duty rate instead of the general 5%.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties once an application is deemed valid. This ensures transparency and allows for objections to be raised before a TCO is made. Furthermore, section 269S(1) mandates that a TCO comes into force on the date the application was lodged. In the case of TCO No. 0514130, this date was 13 October 2005. The Act also ensures that the rights of individuals, excluding the Commonwealth, are not adversely affected by the TCO. For instance, importers can apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Breach of the requirements set out in the Customs Act 1901 can result in various consequences. While the explanatory statement does not detail specific offences or penalties, the general framework of the Act provides for potential civil and criminal sanctions. For example, knowingly making a false statement or providing misleading information in an application for a TCO could result in fines or imprisonment, as per the general provisions of the Customs Act. Additionally, failure to comply with the duty refund process under the Regulations could lead to financial penalties and legal action. The exact penalties would depend on the nature and severity of the breach, as outlined in the broader legislative context.