EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514788
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 0514788 was made on 9 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. 0514788 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 Australian Parliament to regulate the importation and exportation of goods within Australia, among other things. The Act, through its Part XVA, established a framework under which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. This mechanism was designed to provide relief in the form of reduced customs duty on certain goods, provided that specific criteria are met. Tariff Concession Instrument No. 0514788 was introduced to provide a tariff concession for certain yarns, following an application by DPK Australia Pty Ltd. This instrument was enacted to ensure that the application of a tariff concession would not disadvantage existing rights of any party other than the Commonwealth, while providing benefits to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0514788 under the Customs Act 1901 applies to goods specified in the instrument, namely certain yarns, for which DPK Australia Pty Ltd made an application. This legislation is applicable to the goods as of the date the application was lodged, 13 October 2005, and aims to provide a concession on the rate of customs duty from the general rate of 5% to 0% for these goods. The instrument was issued by the Chief Executive Officer of Customs after it was determined that no substitutable goods were produced in Australia at the time the application was made. The geographic and jurisdictional reach of this Act is national, as it pertains to the Commonwealth of Australia, and the instrument is applicable across the entire country. Any person or entity importing the specified yarns can benefit from this concession. The Act does not impose any new liabilities on persons other than the Commonwealth and does not affect any existing rights adversely. Subordinate instruments may further extend or clarify the application of this tariff concession, but the primary focus of this specific instrument is to reduce customs duty on the specified yarns.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269B, 269E, 269F, 269P(3) and 269SJ of the Customs Act 1901 (the Act). Section 269C sets out the core criteria that a Tariff Concession Order (TCO) application must meet, which is when, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines the term 'goods produced in Australia', while section 269E defines 'ordinary course of business'. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, while section 269P(3) states that if the CEO is satisfied that the TCO application meets the core criteria, they must make a written order (a TCO). Finally, section 269SJ sets out those goods that cannot be subject to a TCO. This legislation also includes a provision for the CEO to publish a notice in the Gazette after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO.
The obligations imposed by this legislation on the parties or entities it governs include the requirement for the CEO to consider the application for a TCO and determine whether it meets the core criteria. The CEO must also ensure that the application is not in respect of goods specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, they 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. The CEO must also publish a notice in the Gazette after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO.
There are no offences, penalties, or civil/criminal consequences for breach of this legislation. However, 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, and 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.
In summary, this legislation sets out the criteria for a TCO to be made by the CEO of Customs, and the obligations and requirements imposed on the CEO and any person who considers that there are reasons why the TCO should not be made. There are no offences, penalties, or civil/criminal consequences for breach of this legislation, but 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, and they 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.