EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0614917
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.
Hunter Douglas Limited applied for a TCO in respect of certain multifilament polyester yarn on 30 October 2006.
Instrument
TCO No 0614917 was made on 19 January 2007. It declares that those certain multifilament polyester 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. 0614917 is taken to have come into force on 30 October 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 Customs Act 1901 was enacted to provide for the administration of the revenue laws of Australia, among other things. The Act includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The Tariff Concession Instrument No. 0614917 was introduced by the Parliament of Australia to address the need for tariff concessions on certain imported goods. This instrument allows for a lower rate of customs duty to be applied to specified goods, in this case, certain multifilament polyester yarns. The policy objective behind the instrument is to ensure that no substitutable goods are produced in Australia, thereby benefiting importers by potentially allowing them to claim refunds for duties paid on such goods imported prior to the TCO's effective date. The instrument came into force on the date the application was lodged, 30 October 2006, and does not affect the rights of persons or impose any liabilities on them.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for Tariff Concession Orders (TCOs), which apply to goods for which a lower rate of customs duty is prescribed. The Act allows the Chief Executive Officer (CEO) of Customs to make these orders if certain criteria are met, such as the absence of substitutable goods produced in Australia at the time of application. This mechanism is available to any person who applies for such a concession in relation to specific goods, provided those goods are not excluded under section 269SJ of the Act. The scope of the Act is national, applying across the Commonwealth of Australia. The process for establishing TCOs includes publishing a notice in the Gazette to allow for public submissions, although in the case of TCO No. 0614917, no submissions were received. The application of the TCO, in this case concerning certain multifilament polyester yarns, is effective from the date the application was lodged, without imposing any liabilities or disadvantaging any person other than the Commonwealth.
Key Provisions
The primary sections of the Customs Act 1901 that govern the Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P. Section 269F allows for the application of a TCO to be made to the Chief Executive Officer of Customs (CEO) by a person seeking tariff concessions for specified goods. Section 269C sets out the core criteria that an application must meet for a TCO to be granted, primarily focusing on whether substitutable goods are produced in Australia. If the application meets these criteria, as per section 269P, the CEO must issue a written order that declares the goods to which the TCO applies. This order effectively reduces or eliminates the customs duty on the specified goods.
Under the Act, the CEO has specific obligations when processing a TCO application. Firstly, the CEO must ensure that the application is not for goods that are excluded under section 269SJ. If the application is valid, the CEO must verify that the core criteria outlined in section 269C are met, specifically confirming that no substitutable goods were produced in Australia on the day the application was lodged. Once satisfied with the application, the CEO must publish a notice in the Gazette inviting any objections or submissions from interested parties. The CEO must consider any submissions received before making a final decision on the application. In this case, no submissions were received in response to the published notice.
The Act imposes certain civil and criminal consequences for breaches of its provisions. Under section 269R, the CEO may cancel a TCO if it is found that the conditions for the concession were not met at the time of application. Such cancellation could lead to the reassessment of duties paid on the goods in question, potentially resulting in additional charges or penalties. Furthermore, any person found to have knowingly or recklessly provided false or misleading information in support of a TCO application could face criminal charges under section 269U, which may result in fines or imprisonment. The maximum penalties for these offences are detailed in the Crimes Act 1914 and can include substantial fines and imprisonment terms, depending on the severity of the offence.