EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514134
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 0514134 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. 0514134 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 Tariff Concession Instrument No. 0514134, enacted in 2006, is an instrument under the Customs Act 1901. It was introduced to address the need for providing tariff concessions for specific goods, thereby facilitating trade by reducing the customs duty on these goods. The instrument was made by the Chief Executive Officer of Customs, who has the authority to make such decisions under section 269F of the Act. The objective of this instrument is to ensure that no substitutable goods are produced in Australia, which aligns with the core criteria outlined in section 269C of the Act. This instrument specifically applies to certain Yarn, reducing the customs duty from the general rate of 5% to 0%, benefiting importers who can apply for refunds of duty on goods imported since the instrument came into effect on 13 October 2005.
Scope and Application
The Customs Act 1901, particularly under Part XVA, governs the process through which Tariff Concession Orders (TCOs) may be applied for and granted by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who wishes to apply for a TCO in respect of goods, provided that the goods are not those specifically excluded under section 269SJ. The application process involves satisfying the core criteria outlined in sections 269C, 269D, and 269E of the Act, ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. Once the CEO is satisfied with the application, a TCO is issued, thereby applying a lower rate of customs duty to the specified goods. This Act has a national reach within Australia, and its application is not limited by state or territory boundaries. Importantly, the TCO does not impose any disadvantages or liabilities on persons other than the Commonwealth, and it does not affect any rights accrued before its registration. The TCO can be further extended or restricted through subordinate instruments, which are governed by the provisions of the Act and related regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0514134 (the Instrument) under the Customs Act 1901 (the Act) involve the creation of a Tariff Concession Order (TCO) (section 269F). This particular Instrument, which was made on 3 January 2006, declares that certain yarns are subject to a 0% customs duty rate instead of the general 5% rate, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (section 269P(3)). The Instrument is effective from 13 October 2005, the date the application for the TCO was lodged (section 269S(1)). The Chief Executive Officer of Customs (the CEO) must be satisfied that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C).
The Act imposes several obligations and requirements on the parties governed by it. Firstly, a person must apply to the CEO for a TCO in respect of goods if they wish to obtain tariff concessions (section 269F). The CEO must then determine whether the application is valid, which involves checking that the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (section 269SJ). If the application meets the core criteria, the CEO must make a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the TCO can proceed as per the terms of the Instrument.
In terms of offences, penalties, or consequences for breaches, the Act does not explicitly state penalties for non-compliance with the TCO provisions. However, it is implied that any misuse of the tariff concessions granted by a TCO could potentially lead to legal consequences under the broader framework of the Customs Act 1901. For instance, if goods are falsely classified to benefit from a lower duty rate, this could be considered an offence under the Act, potentially leading to fines or other penalties as prescribed by the Act. The Act also ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
The Instrument itself does not impose any liabilities on any person, ensuring that the rights of individuals and entities, other than the Commonwealth, are not adversely affected by the concessions provided (subsection 269S(2)). This means that any person importing goods before the TCO was registered will not be subject to the concessions, thereby avoiding potential disadvantages or liabilities that might arise from the retroactive application of the TCO.