EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617443
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.
Melbourne Knitting Textile Company Pty Limited applied for a TCO in respect of certain worsted spun wool yarns on 21 September 2006.
Instrument
TCO No 0617443 was made on 06 March 2007. It declares that those certain worsted spun wool 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. 0617443 is taken to have come into force on 21 September 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 by the Commonwealth Parliament to provide for the regulation of customs and excise, among other things. The Tariff Concession Order No. 0617443, made in 2007, addresses a specific gap in the Customs Act by providing for a lower rate of customs duty on certain worsted spun wool yarns, which were the subject of an application by Melbourne Knitting Textile Company Pty Limited. The objective of this particular TCO is to grant tariff concessions on the specified goods, ensuring they benefit from a duty-free rate, provided no substitutable goods are produced in Australia, aligning with the core criteria under section 269C of the Act. The instrument was made effective from the date the application was lodged, 21 September 2006, and does not disadvantage any person other than the Commonwealth, nor does it impose any liabilities on individuals.
Scope and Application
The Customs Act 1901, through Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), providing lower rates of customs duty for specified goods. This Act applies to individuals or entities that seek to import goods eligible for tariff concessions, ensuring that the application meets certain criteria such as the non-existence of substitutable goods produced in Australia in the ordinary course of business. The geographic reach of this Act is national, affecting all importers across Australia. The Act excludes certain goods from tariff concessions, as outlined in section 269SJ. The TCO process extends to include public consultation, as mandated by section 269K, though in this case, no submissions were received. The application for a TCO is effective from the date it is lodged, as per subsection 269S(1), and the rights of importers are protected under the Act to ensure no disadvantage or additional liabilities are imposed.
Key Provisions
The main operative sections of this legislation include sections 269C, 269F, and 269P of the Customs Act 1901, which provide the framework for the application, assessment, and issuance of Tariff Concession Orders (TCOs). Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the core criteria, section 269P mandates that the CEO must make a written order (a TCO) declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by the Act on the parties and entities it governs include the necessity for the CEO to assess whether the application for a TCO meets the core criteria and to make a written order if it does. The CEO must also publish a notice in the Gazette, inviting submissions from any person who considers that there are reasons why the TCO should not be made, as per subsection 269K(1). The CEO must ensure that the TCO does not affect the rights of a person (other than the Commonwealth) in a way that would disadvantage that person or impose liabilities on them in respect of anything done or omitted to be done before the date of registration.
Regarding the consequences for breach, the Customs Act 1901 does not explicitly state specific offences, penalties, or civil/criminal consequences for failure to comply with the requirements of the Act or the TCOs. However, any breaches of related regulations or misuse of the concessions provided by a TCO may lead to penalties under the broader Customs Act 1901. For instance, if an entity falsely claims eligibility for a TCO, they could potentially face penalties for misrepresentation or fraud, which can include substantial fines and imprisonment, depending on the severity of the offence. The specific penalties would be determined in accordance with the general provisions of the Customs Act and any related legislation.