EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514131
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 0514131 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. 0514131 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, provides a framework for the imposition and collection of customs duties on imported goods. To address specific economic and trade policy objectives, the Act includes provisions for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. The Explanatory Statement for Tariff Concession Instrument No. 0514131, issued on 3 January 2006, outlines the process for granting a TCO to DPK Australia Pty Ltd in respect of certain yarn, which became effective from the date the application was lodged, 13 October 2005. The primary policy objective in this context is to support Australian industries by providing tariff relief on goods that are not produced domestically, thereby encouraging competitive trade practices and potentially lowering costs for businesses and consumers. The instrument was published in the Gazette, inviting submissions but receiving none, thereby allowing the concession to proceed without opposition.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions for specific goods entering Australia, with the Tariff Concession Orders (TCO) process outlined in Part XVA. This legislation allows for a reduction in customs duty on goods specified in a TCO, provided the Chief Executive Officer of Customs (CEO) is satisfied that no substitutable goods are produced in Australia and the application meets the core criteria. Goods that are the subject of a TCO application must not be specified in section 269SJ of the Act, which details goods ineligible for tariff concessions. The CEO must publish a notice inviting submissions from any interested parties, although in this instance, no submissions were received. The TCO process affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force, without imposing any new liabilities. This instrument applies nationally across Australia and is subject to the Commonwealth jurisdiction. The CEO’s decisions on TCOs may be extended or restricted through subordinate instruments, though this specific TCO does not affect the rights of any person or impose new liabilities.
Key Provisions
The primary sections of this legislation that pertain to the Tariff Concession Order (TCO) are section 269C, which sets out the core criteria for TCO applications, and section 269P(3), which mandates the CEO to issue a written order if the application meets these criteria (sections 269C and 269P(3)). The instrument, TCO No. 0514131, specifies the particular yarns subject to the concession, linking them to item 50 of Schedule 4 of the Customs Tariff Act 1995, and reduces the duty from 5% to 0% (section 269P(3)).
The Act imposes several obligations on the Chief Executive Officer of Customs (CEO) and applicants. Firstly, the CEO must assess whether a TCO application meets the core criteria, which requires that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). If the criteria are met, the CEO must issue a written TCO order (section 269P(3)). Furthermore, the CEO is obligated to publish a notice in the Gazette, inviting any interested parties to submit their views on the application as soon as practicable after accepting it as valid (subsection 269K(1)). This was carried out for TCO No. 0514131, although no submissions were received.
Breach of the requirements set forth in this Act can result in civil and criminal consequences. However, the explanatory statement does not detail specific offences or penalties within the text provided. Generally, under the Customs Act 1901, non-compliance with customs regulations can result in penalties such as fines or imprisonment, depending on the severity of the breach. The specific penalties for breaches related to TCOs would need to be examined in the context of the broader Customs Act provisions.