EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609314
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.
Genevieve Yarn Dyers (Australia) Pty Ltd applied for a TCO in respect of certain single ply knitting yarns on 30 May 2006.
Instrument
TCO No 0609314 was made on 11 August 2006. It declares that those certain single ply knitting yarns 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 free.
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. 0609314 is taken to have come into force on 30 May 2006.
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. 0609314, enacted in 2006, addresses the need for a streamlined process within the Customs Act 1901 for granting tariff concessions on specific goods. This instrument was introduced to facilitate a reduction in customs duty rates for certain goods, thereby providing economic benefits to businesses and consumers. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make Tariff Concession Orders, which apply a lower rate of customs duty to goods specified in the order. The objective of this instrument is to ensure that the application process for tariff concessions is efficient and that the rights of all stakeholders, particularly importers, are protected. The instrument was made following an application by Genevieve Yarn Dyers (Australia) Pty Ltd for a tariff concession on single ply knitting yarns, which was approved as no substitutable goods were produced in Australia at the time of application.
Scope and Application
The Tariff Concession Instrument No. 0609314 under the Customs Act 1901 applies to certain single ply knitting yarns, providing a concession by reducing the rate of customs duty from the general rate of 5% to free, provided the goods are imported under the terms of this order. The Act is administered by the Chief Executive Officer of Customs, who must consider whether applications for tariff concessions meet the core criteria, specifically whether no substitutable goods are produced in Australia in the ordinary course of business. The legislation applies nationally across Australia as it is an instrument under the Commonwealth Customs Act 1901, and its implementation does not affect any rights or liabilities of persons other than the Commonwealth. Exemptions and exclusions are governed by section 269SJ of the Act, which details the goods that cannot be subject to a tariff concession. The application of this instrument may be extended or restricted through subordinate instruments, allowing for the detailed administration of tariff concessions as necessary.
Key Provisions
The main operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. If the CEO determines that the application meets the core criteria under section 269C, they must make a written order (a TCO) specifying that the goods in question are subject to a particular rate of duty under the Customs Tariff Act 1995. The CEO must also ensure that the application is not for goods specified in section 269SJ, which are ineligible for a TCO. Section 269P(3) outlines the process for the CEO to make a TCO if the application meets the core criteria.
The Act imposes several obligations on the parties it governs. Firstly, applicants for a TCO must ensure their application is for goods that are not specified in section 269SJ of the Act. They must also demonstrate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid. They must also decide whether to make a TCO within a reasonable timeframe if the application meets the core criteria. Additionally, under section 269S(1), a TCO is considered to come into force on the day the application was lodged, and it does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth.
Breaching the provisions of the Customs Act 1901 can lead to various penalties and consequences. The Act does not specify particular offences or penalties related to TCO applications directly, but general penalties for breaches of customs laws may apply. These penalties can include fines and imprisonment for serious offences, as outlined in the Customs Act and associated regulations. For example, under section 126 of the Customs Regulations 1993, a person who knowingly makes a false statement in connection with a customs matter may be subject to a penalty of up to five times the value of the goods involved or imprisonment for up to five years, or both. Additionally, there may be civil consequences for non-compliance, such as the imposition of duties or interest on unpaid duties.