EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514159
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 0514159 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. 0514159 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, establishes the legal framework for managing customs duties and other regulations pertaining to the import and export of goods. A specific provision within this Act, part XVA, allows the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) that provide reduced customs duties on certain goods under specified conditions. This legislation addresses the gap by formalising a process through which businesses can apply for tariff concessions, ensuring that such concessions are only granted when no substitutable goods are produced in Australia. The policy objective is to facilitate trade by reducing the duty burden on specific imported goods, thereby promoting economic efficiency and competitiveness in the marketplace. The CEO must ensure that the concessions do not disadvantage any person and that the rights of importers are preserved, including the ability to apply for duty refunds on eligible goods imported since the concession order came into effect.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism allows for the application of lower rates of customs duty on specific goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia in the ordinary course of business. DPK Australia Pty Ltd successfully applied for a TCO for certain yarns, resulting in Instrument No. 0514159, which reduced the duty rate from 5% to 0%. This legislation applies to entities such as importers who seek to benefit from the concessional duty rates. The geographic and jurisdictional reach of the Act is national, as it operates under the auspices of the Commonwealth of Australia. Notably, the Act excludes goods specified in section 269SJ, which are ineligible for TCOs. The application of TCOs can be extended or refined through subordinate instruments, although the primary legislation itself does not provide for such extensions. The commencement of the TCO aligns with the date of the application, ensuring that the rights of entities such as importers are protected from any disadvantage arising from the concession.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, establish the framework for the creation and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, and 269S). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. Section 269C stipulates that a TCO application is considered to meet the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the TCO application meets the core criteria, a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 must be made. Section 269K requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made. Finally, section 269S(1) stipulates that a TCO is deemed to come into force on the day the application for the TCO was lodged.
Under the Customs Act 1901, the CEO is tasked with several obligations and requirements when processing a TCO application. The CEO must first ensure that the application is valid and pertains to goods not specified in section 269SJ of the Act. If the CEO is satisfied that the application is valid and meets the core criteria, they must make a TCO. The CEO must also publish a notice in the Gazette, inviting submissions from interested parties on why the TCO should not be made. The CEO must consider any submissions received and make a decision based on the merits of the application and any submissions received.
The Customs Act 1901 includes provisions for offences, penalties, and consequences for breaches of the Act. While the specific penalties for breaching the Act are not detailed in the explanatory statement, it is known that breaches of the Customs Act 1901 can result in civil or criminal penalties, including fines and imprisonment. The maximum penalties for breaches of the Act depend on the nature and severity of the offence. It is important to note that the explanatory statement does not provide specific information on the maximum penalties for breaches of the Act.
In conclusion, the Customs Act 1901 sets out the framework for the creation and implementation of Tariff Concession Orders. The Act requires the CEO to process TCO applications, consider submissions from interested parties, and make a decision based on the merits of the application and any submissions received. The Act also includes provisions for offences, penalties, and consequences for breaches of the Act, although the specific penalties for breaches are not detailed in the explanatory statement. It is important for parties and entities governed by the Act to be aware of their obligations and requirements under the Act, as well as the potential consequences of breaching the Act.