EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514135
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 0514135 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. 0514135 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods and the collection of customs duty. It provides the legislative framework for the administration of the Customs Tariff and the imposition of customs duty on imported goods. The Act was introduced to address the need for a structured and comprehensive system to manage the import and export processes, ensuring compliance and facilitating trade. Tariff Concession Orders (TCOs) are a key feature of the Act, allowing for reduced or waived customs duty on certain goods under specific conditions. The Customs Act 1901 aims to balance trade facilitation with the need to protect domestic industries and collect necessary revenue. The instrument, Tariff Concession Instrument No. 0514135, was made under the authority of the Customs Act 1901 to provide tariff concessions for certain yarn, reflecting the policy objective of supporting specific industries by reducing the financial burden of customs duties on certain imported goods.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the application and implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person who may apply for a TCO for goods under section 269F, provided the goods are not specified in section 269SJ as those that cannot be subject to a TCO. The Act stipulates that a TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E, and 269B of the Act. Once the CEO is satisfied that the application meets these criteria, a written TCO is issued, which applies to the specific goods listed in the order and reduces the duty rate as specified in Schedule 4 to the Customs Tariff Act 1995. This instrument affects the entire Commonwealth jurisdiction and is subject to subordinate regulations that further define terms such as "substitutable goods" and "ordinary course of business". The TCOs do not retroactively affect the rights of any person and do not impose any liabilities on individuals, ensuring that only the rights of importers are beneficially affected, such as the ability to apply for a refund of duty on goods imported since the date the TCO came into force.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0514135, made under the Customs Act 1901, include section 269C, which outlines the core criteria for a Tariff Concession Order (TCO) application to be approved. According to section 269C, a TCO application is eligible if, on the day the application was submitted, there were no substitutable goods produced in Australia in the ordinary course of business (s 269C). Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets these criteria, a written TCO must be issued. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person who believes there are reasons the TCO should not be made to submit their concerns. The TCO itself, once issued, declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the associated duty rate.
The obligations imposed by this legislation primarily concern the CEO of Customs. The CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ of the Customs Act 1901 (s 269F). The CEO must also verify that the application meets the core criteria set out in section 269C, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made (s 269K(1)).
The Customs Act 1901 does not explicitly outline offences, penalties, or consequences for breach in the context of Tariff Concession Orders. However, the broader Customs Act may contain provisions regarding penalties for non-compliance with customs regulations, including fines and imprisonment for serious breaches. In the case of the TCO, if any party violates the terms of the concession by, for instance, falsely claiming eligibility for the tariff concession, they could face civil or criminal penalties under the relevant sections of the Customs Act 1901. It is important to note that the TCO itself does not impose any liabilities on any person (s 269S(1)).