EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514156
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 0514156 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. 0514156 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, addresses the need for a structured approach to tariff concessions on imported goods. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions, facilitating lower customs duties on certain goods through the issuance of Tariff Concession Orders (TCOs). The process is intended to provide relief to Australian importers by reducing the cost of importing specific goods, provided that there are no domestically produced substitutes. The policy objective is to ensure that such tariff concessions do not disadvantage local industries by being applied to goods that could be manufactured within Australia. The Customs Act 1901, through its provision for TCOs, thus aims to balance the interests of importers and the broader Australian economy by selectively lowering customs duties on goods where no local production exists.
Scope and Application
The Tariff Concession Instrument No. 0514156 under the Customs Act 1901 applies to the goods specified in the order, namely certain Yarn, and is directed at entities such as DPK Australia Pty Ltd that seek tariff concessions on their imported goods. This particular legislation is applicable to those goods for which no substitutable products are produced in Australia, thereby qualifying for a concession on customs duty rates. The Act operates within the Commonwealth jurisdiction and influences the import process by reducing the duty on specific goods from the general rate to zero per cent. The concessions provided by the Tariff Concession Orders are contingent upon meeting the core criteria outlined in the Act, including the non-production of substitutable goods in Australia. While the primary focus of the legislation is on tariff concessions, it does not extend to goods specified in section 269SJ of the Act, which are ineligible for such concessions. The application process involves an invitation for submissions published in the Gazette, though in this case, no objections were received. The order's commencement is retroactive to the date the application was lodged, ensuring that importers can seek refunds for duties paid on the goods since the effective date of the order, without imposing new liabilities on any party.
Key Provisions
The main operative sections of this legislation, particularly section 269F of the Customs Act 1901, permit a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. Section 269C sets out the criteria that must be met for the CEO to consider the application. If the CEO is satisfied that the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO, and that no substitutable goods were produced in Australia in the ordinary course of business, as defined in section 269E and 269D respectively, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular TCO, No. 0514156, made on 3 January 2006, applies to certain yarn, granting a zero percent duty rate on these goods, effective from the date of application, 13 October 2005.
The obligations imposed by this Act on the parties involved, particularly the CEO, are significant. Upon receiving a valid application for a TCO, the CEO must ensure that the application does not pertain to goods specified in section 269SJ and must verify that no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that the application meets the core criteria, they are required to make a TCO and declare the specific goods to which the concession applies. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions in response to this invitation.
The consequences for non-compliance or breach of this Act are not explicitly detailed within the text provided, but generally, under Australian law, breaches of customs regulations can result in significant penalties. Offences related to the improper application of TCOs may attract criminal charges, with penalties that can include substantial fines and, in some cases, imprisonment. Civil penalties may also apply, where the courts may impose fines up to the statutory maximum amounts as prescribed by the applicable laws. The specific penalties would depend on the nature and severity of the breach, as well as the discretion of the court or relevant authority.