EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618518
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.
Australian Weaving Mills Pty Ltd applied for a TCO in respect of certain mercerised combed cotton yarn on 29 November 2006.
Instrument
TCO No 0618518 was made on 02 March 2007. It declares that those certain mercerised combed 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 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. 0618518 is taken to have come into force on 29 November 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. 0618518, enacted in 2007, pertains to the Customs Act 1901. This legislation was introduced to facilitate tariff concessions on specific goods, which are outlined in the Customs Tariff Act 1995. The primary objective is to provide relief by reducing or eliminating customs duty on certain goods, thereby encouraging their import and potentially lowering costs for consumers. This instrument was enacted by the Chief Executive Officer of Customs under the authority granted by the Customs Act 1901. The policy objective is to support Australian industries by ensuring that no substitutable goods are produced domestically, thereby maintaining a competitive edge for imported goods.
Scope and Application
The Tariff Concession Instrument No. 0618518 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions on specific goods imported into Australia. The instrument is targeted at those who can demonstrate that the goods in question are not substitutable by locally produced items and thereby meet the core criteria specified in section 269C of the Act. The geographic reach of this legislation is national, operating under the Commonwealth's authority as it pertains to customs duties and tariffs. The instrument excludes goods listed in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. The application of this legislation can be extended or restricted through subordinate instruments, although in this specific case, no exclusions, exemptions, or thresholds beyond those already mentioned in the primary Act were noted. The process for establishing a Tariff Concession Order includes public consultation as mandated by subsection 269K(1) of the Act, although in this instance, no submissions were received. The order comes into force on the date the application was lodged, as specified by subsection 269S(1) of the Act.
Key Provisions
The Customs Act 1901, particularly under Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs (CEO) to reduce the customs duty on specific goods. When an individual or entity applies for a TCO, as outlined in section 269F, the CEO must ensure that the goods in question are not listed in section 269SJ, which specifies items ineligible for TCOs. If the application does not concern these ineligible goods, the CEO evaluates whether it meets the core criteria set out in section 269C. This criterion is satisfied if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E respectively.
Under section 269P(3), if the CEO is satisfied that the application meets these criteria, they must issue a written TCO. For instance, TCO No. 0618518 was issued on 2 March 2007 for certain mercerised combed cotton yarn, declaring that these goods are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general 5%. As per the Act, TCOs do not retroactively affect rights or impose liabilities on any person, safeguarding existing rights and ensuring that no one is disadvantaged by the introduction of the TCO.
The Act imposes specific obligations on both the CEO and the applicants for TCOs. The CEO is required to ensure that the application is valid and does not pertain to ineligible goods, as well as to publish a notice in the Gazette inviting submissions from interested parties, as per subsection 269K(1). In this case, no submissions were received. Additionally, section 269S(1) mandates that a TCO takes effect on the day the application is lodged, ensuring that the tariff concession is effective immediately from the application date.
Breach of the provisions in the Customs Act 1901 or the associated regulations can lead to various civil or criminal consequences. For example, misrepresenting facts in a TCO application could result in penalties as stipulated in the relevant sections of the Act or the Regulations. The severity of the penalties can vary, but they may include fines and, in some cases, criminal prosecution for serious breaches. These measures ensure compliance with the tariff concession scheme and protect the integrity of the customs duty system.