EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515068
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.
Metalicus Australia Pty Ltd applied for a TCO in respect of certain Cotton Yarn on 31 October 2005.
Instrument
TCO No 0515068 was made on 16 January 2006. It declares that those certain Cotton 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. 0515068 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0515068, enacted in 2006, is a measure under the Customs Act 1901 aimed at providing relief on customs duty for specific goods. This legislation was introduced to address the problem of imposing prohibitive tariffs on certain imported goods, which could hinder trade and economic activity. The instrument was enacted by the Chief Executive Officer of Customs, following an application by Metalicus Australia Pty Ltd for tariff concessions on certain Cotton Yarn. The policy objective of this measure is to facilitate smoother trade operations by reducing the duty burden on certain goods, provided no substitutable goods are produced in Australia, thereby enhancing competitive advantage and economic efficiency. The instrument took effect from the date of application, 31 October 2005, and does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0515068 applies to Cotton Yarn, specifically to those goods that are the subject of an application for a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. The instrument targets entities and individuals involved in the importation of Cotton Yarn, providing them with a lower rate of customs duty if certain criteria are met. The instrument is applicable nationally across Australia, aligning with the provisions outlined in the Customs Act 1901 and the Customs Tariff Act 1995. It excludes goods specified in section 269SJ of the Act, which are not eligible for a TCO. The instrument is effective from the date the TCO application was lodged, 31 October 2005, and does not retroactively affect any rights or liabilities of individuals or entities other than the Commonwealth. The CEO of Customs has the authority to extend or restrict the application of the TCO through subordinate instruments, ensuring flexibility in its implementation.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). These sections outline the process by which an application for a TCO can be made (section 269F), the criteria that must be met for such an order to be granted (section 269C), and the specific conditions under which the CEO must make a written order (section 269P(3)). A key requirement is that the application must not be in respect of goods specified in section 269SJ, which are ineligible for a TCO. Furthermore, the CEO must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The CEO must also publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as valid (subsection 269K(1)).
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. Firstly, applicants such as Metalicus Australia Pty Ltd must ensure their applications are made in accordance with the Act and are not in respect of ineligible goods (section 269SJ). The CEO, on receiving a valid application, must then assess whether it meets the core criteria and publish a notice in the Gazette (section 269K(1)). The CEO must also decide whether to grant the TCO based on the criteria set out in section 269C. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's effective date.
The Customs Act 1901 includes provisions for civil and criminal consequences in the event of non-compliance with the Act. While the specific offences, penalties, and consequences are not detailed in the text, it is implied that breaches of the Act could result in legal actions. For instance, if an entity fails to comply with the requirements for applying for a TCO or if the CEO makes an order in contravention of the Act, there could be significant repercussions. The maximum penalties for such breaches, however, are not specified within the provided text. It is essential for all parties to adhere to the legislative requirements to avoid any adverse legal consequences.