EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514136
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 0514136 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. 0514136 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 Parliament of Australia, established a framework through which the Chief Executive Officer of Customs could make Tariff Concession Orders (TCOs). This was to address the need for a mechanism that would allow for lower rates of customs duty on certain goods, thereby promoting fair trade practices and economic efficiency. Specifically, the Act allows for the application of a lower rate of customs duty on goods that are the subject of a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business. DPK Australia Pty Ltd applied for such a concession on certain yarn, resulting in Tariff Concession Instrument No. 0514136, which was issued on 3 January 2006. This instrument declared that the yarn in question was subject to a zero percent duty rate, effective from 13 October 2005, the date of the application. The policy objective is to ensure that Australian businesses can access necessary goods at a reduced tariff rate, enhancing their competitiveness without disadvantaging existing stakeholders.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the process for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO). This legislation allows for lower rates of customs duty on certain goods, provided that the application for a TCO meets the specified core criteria and is not in relation to goods that are excluded under section 269SJ. The application process is designed to ensure that no substitutable goods are produced in Australia, as defined by sections 269D, 269E, and 269F of the Act. Upon meeting these criteria, the CEO is mandated to issue a TCO, as exemplified by TCO No. 0514136, which applies to specific yarns and reduces their duty rate from 5% to 0%. This concession is applicable nationally and is effective from the date of the application, as outlined in section 269S(1) of the Act. The legislation ensures that any rights or liabilities of parties other than the Commonwealth are not adversely affected by the TCO, and importers may also benefit from duty refunds on goods imported since the TCO's effective date, as per the Customs Tariff Regulations.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0514136 (the Instrument) relate to the granting of Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901 (the Act). Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. In this case, the Instrument declares that certain yarn is subject to item 50 of Schedule 4, resulting in a 0% duty rate, down from the general rate of 5%.
The obligations imposed by the Act on parties include the requirement for applicants, such as DPK Australia Pty Ltd, to ensure their applications meet the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. The CEO has the obligation to assess the application against these criteria and, if satisfied, to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, although in this case, no submissions were received. The Act ensures that the rights of individuals other than the Commonwealth are not adversely affected by the TCO, and it provides for a refund of duty to importers of the specified goods from the date the TCO is deemed to have come into force.
In terms of breaches and penalties, the Act does not specify criminal or civil penalties for failing to comply with the requirements of a TCO or for making a false statement in an application. However, any breaches of the Customs Act or associated regulations, such as incorrect declaration of goods or fraud, can lead to civil or criminal penalties. For example, providing false information to obtain a TCO could result in fines or imprisonment under the relevant provisions of the Customs Act.
The Instrument itself does not create new liabilities for any person, and it does not disadvantage any person other than the Commonwealth. It ensures that the rights of importers will be beneficially affected, particularly regarding the ability to apply for a refund of duty on goods imported since the TCO came into force. The CEO's decision to grant the TCO is based on meeting the criteria laid out in the Act, and the lack of submissions in response to the Gazette notice indicates that there were no objections to the concession being granted.