EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514153
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 0514153 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. 0514153 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, was amended to introduce Tariff Concession Orders (TCOs) under Part XVA, aiming to provide lower customs duty rates on certain goods. This was designed to address economic competitiveness issues by reducing costs for businesses that rely on importing specific goods not produced domestically. The policy objective is to ensure that the importation of goods not manufactured in Australia does not unfairly disadvantage Australian businesses and consumers. The Customs Act 1901 allows the Chief Executive Officer of Customs to make these orders if it is determined that no substitutable goods are produced in Australia and that the application meets the specified criteria. This legislative framework facilitates tariff concessions to support industries that depend on imported materials, thus promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0514153 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), specifically in this case, certain types of yarn. The Act permits the Chief Executive Officer of Customs (CEO) to grant a TCO to reduce the rate of customs duty on goods if certain conditions are met, including the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO applies to DPK Australia Pty Ltd and the particular yarn it imports, and the concession reduces the duty rate from 5% to 0%. The application of this Act is national in scope, as it is part of Commonwealth legislation. There are no stated exclusions in this particular TCO; however, the Act excludes certain goods from being subject to a TCO under section 269SJ. The Act allows for further regulation and application through subordinate instruments, which can specify additional details or conditions for TCOs.
Key Provisions
The main sections of this legislation include sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901, as well as subsection 269K(1). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, a TCO can be made. Section 269P(3) mandates that if the CEO is satisfied the application meets the criteria, they must issue a TCO. Section 269SJ specifies goods that cannot be subject to a TCO. Subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from interested parties if a TCO application is accepted as valid.
The obligations imposed by this legislation include the requirement for the CEO to assess whether an application for a TCO meets the core criteria, which involves determining if no substitutable goods are produced in Australia on the date the application is lodged. If the CEO is satisfied that the application meets the core criteria, they must issue a TCO. Additionally, the CEO is required to publish a notice in the Gazette and invite submissions from interested parties once a TCO application is accepted as valid. The TCO must declare that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specified rate of duty.
The legislation does not explicitly outline specific offences, penalties, or consequences for breach. However, failure to comply with the requirements to issue a TCO when the core criteria are met, or to publish a notice and invite submissions when appropriate, could lead to legal challenges regarding the validity of the TCO. Non-compliance with these obligations could potentially result in the TCO being overturned, thereby impacting the rights and benefits of the applicants and importers of the affected goods. The specific legal consequences would depend on subsequent legal interpretations and court decisions.
In summary, the Customs Act 1901 and the associated explanatory statement provide a framework for the issuance of TCOs by the CEO. The key obligations include assessing applications against the core criteria, issuing TCOs where appropriate, and publishing notices and inviting submissions to ensure transparency and fairness. While specific penalties are not outlined, non-compliance with these obligations could have significant legal implications for the parties involved.