EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514132
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 0514132 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. 0514132 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, outlines the framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). The Act addresses the gap in providing tariff concessions to ensure that certain goods are subject to a lower rate of customs duty, thereby promoting economic efficiency and competitiveness. This is achieved through section 269F, which allows for applications to the CEO for a TCO in respect of goods, provided the application meets the core criteria set out in sections 269C and 269P. The policy objective is to reduce the duty on specific goods where there are no substitutable goods produced in Australia, thereby benefiting importers and potentially stimulating demand and investment in these goods. The explanatory statement indicates that Tariff Concession Instrument No. 0514132, made on 3 January 2006, applies to certain Yarn, setting the duty rate at 0% instead of the general 5%, and was introduced following a successful application by DPK Australia Pty Ltd.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) provision under Part XVA, applies to any person or entity seeking a reduction in customs duty for specified goods, provided these goods are not listed in section 269SJ and meet the core criteria outlined in sections 269C, 269D, and 269E. The Act facilitates this by allowing the Chief Executive Officer of Customs to make an order that lowers the duty rate if no substitutable goods are produced in Australia. This mechanism is particularly pertinent to industries reliant on imported goods where local production does not meet the same specifications or purposes. The TCO has a national reach across Australia and is subject to the broader Customs Act 1901, which governs customs duties and regulations. The TCO No 0514132, effective from 13 October 2005, specifically reduced the duty on certain yarns from 5% to 0%, benefiting importers of these goods. The process includes mandatory public consultation, although in this case, no submissions were received. The TCO does not retroactively affect existing rights or impose new liabilities on individuals or entities, ensuring that it only benefits those who import after its effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0514132 under the Customs Act 1901 (section 269P(3)) declare that the specific yarns are subject to a zero percent customs duty rate, instead of the usual 5 percent, as the Chief Executive Officer of Customs (section 269C) was satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269F). The instrument also outlines that the concession order came into effect from the date the application was made, 13 October 2005 (section 269S(1)). This instrument was made following a successful application by DPK Australia Pty Ltd (section 269K(1)) and subsequent publication in the Gazette with no objections received (section 269K(1)).
The obligations imposed by this Act primarily fall on the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria outlined in the Act. These criteria include confirming that no substitutable goods were produced in Australia on the day of application (section 269C). The CEO is also required to publish a notice in the Gazette inviting submissions if any party believes the TCO should not proceed (section 269K(1)). Additionally, the Act requires that the TCO not affect the rights of any person as of the registration date, nor impose any liabilities on anyone except the Commonwealth (section 269S(1)).
The Tariff Concession Instrument No. 0514132 outlines specific consequences for non-compliance with the provisions of the Customs Act 1901. While the explanatory statement does not detail specific offences or penalties for breaching the Act, it is known that breaches of customs regulations generally can lead to civil and criminal penalties. Civil penalties can include fines and other monetary penalties, while criminal penalties may result in imprisonment. The maximum penalties can vary depending on the nature and severity of the breach, with potential for significant fines and lengthy imprisonment terms for serious or repeated offences. It is essential for entities governed by this Act to ensure compliance to avoid these consequences.