EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619081
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.
Macquarie Textiles Group Ltd applied for a TCO in respect of certain carded and spun yarns on 28 November 2006.
Instrument
TCO No 0619081 was made on 2 March 2007. It declares that those certain carded and spun 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 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. 0619081 is taken to have come into force on 28 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the customs and border control system, providing a framework for the imposition of customs duties and the administration of customs and excise matters. The introduction of the Customs Act was to address the need for a comprehensive legal structure to manage international trade, ensuring that customs duties are collected correctly and that goods entering the country are properly regulated. Under Part XVA of this Act, the Chief Executive Officer of Customs has the authority to issue Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods. This legislative provision was introduced to address gaps in trade efficiency by offering relief to importers of certain goods, particularly those where no domestic production equivalent exists. The policy objective behind the issuance of TCOs is to support Australian industries by ensuring that they are not unfairly disadvantaged by the availability of cheaper imported alternatives, thereby promoting fair competition and economic stability.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs (CEO). The Act applies to any person or entity seeking a concession on customs duty for goods that meet certain criteria. The concessions, which are granted through the TCOs, reduce the rate of customs duty for goods specified in these orders, provided that no substitutable goods are produced in Australia in the ordinary course of business. The Act has a national jurisdictional reach as it is an instrument of the Commonwealth. Any application for a TCO must comply with the core criteria outlined in sections 269C and 269SJ of the Act, which detail the conditions for the production of substitutable goods and the types of goods ineligible for a concession, respectively. The application process requires the CEO to publish a notice in the Gazette inviting objections, although no objections were received in the case of Macquarie Textiles Group Ltd's application for certain carded and spun yarns. The TCO, once registered, benefits the rights of importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0619081, under the Customs Act 1901, concern the granting of tariff concessions for specific goods. Section 269F (1) of the Act allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding particular goods. If the application is not for goods listed in section 269SJ, the CEO must then determine if the application meets the core criteria stipulated in section 269C. Specifically, for a TCO application to meet these criteria, it must be the case that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO finds the application meets these criteria, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question, as per subsection 269P(3).
The Act imposes several obligations on the parties involved. For instance, section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes there are grounds for not granting the TCO to lodge a submission. The CEO must then consider these submissions before making a decision. In the case of Macquarie Textiles Group Ltd’s application for a TCO concerning certain carded and spun yarns, the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria. The CEO issued TCO No. 0619081 on 2 March 2007, declaring that the specified yarns are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of 0%.
In terms of potential breaches and penalties, the Act does not explicitly outline specific offences or penalties related to the application or issuance of a TCO. However, any improper conduct or misrepresentation in the application process could potentially lead to civil or criminal consequences under broader provisions of the Customs Act 1901 or other relevant legislation. For example, fraudulent applications or providing false information could result in penalties under the Crimes Act 1914, which may include fines and imprisonment. The precise penalties would depend on the nature and severity of the breach, as well as the specific laws applicable at the time of the offence.