EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708638
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.
Albany International Pty Limited applied for a TCO in respect of certain nylon yarns on 06 June 2007.
Instrument
TCO No 0708638 was made on 17 August 2007. It declares that those certain nylon 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. 0708638 is taken to have come into force on 06 June 2007.
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, enacted by the Australian Parliament, addresses the need for a flexible tariff structure to facilitate trade and economic growth. One of the mechanisms established under this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which allow for reduced customs duty rates on certain goods, provided they meet specified criteria. This process was designed to support industries by reducing costs on imported goods where there is no domestic production. TCO No. 0708638, introduced on 17 August 2007, is an example of such an order, reducing the duty on certain nylon yarns from 5% to free, thereby benefiting the importing party. This instrument was introduced following an application by Albany International Pty Limited, and after no objections were raised, it came into force on the date of the application, 06 June 2007, with no retroactive impact on pre-existing rights or liabilities.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0708638, facilitates the application of reduced customs duties on specific goods via Tariff Concession Orders (TCOs). This process applies to entities and individuals seeking to import goods that are not being produced in Australia in the ordinary course of business. The Act extends its application to all entities and individuals involved in the importation of goods across Australia, thereby encompassing a broad spectrum of industries and transactions. The scope of the Act includes the assessment and application of duty rates as prescribed in the Customs Tariff Act 1995, with specific exemptions for goods outlined in section 269SJ of the Customs Act. This legislation ensures that the application for TCOs is transparent, with the CEO of Customs required to publish notices inviting submissions from interested parties. The application of this legislation is governed by the date of the TCO application, with no retroactive disadvantages to persons other than the Commonwealth.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0708638 pertain to the creation and effects of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C outlines the core criteria that must be met for a TCO application to be approved, which includes the absence of substitutable goods produced in Australia on the day the application was lodged (section 269D and 269E). If the CEO is satisfied that the application meets these criteria, a TCO must be made under section 269P(3). This TCO declares that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, effectively applying a lower rate of customs duty to them.
The Act imposes several obligations on parties involved with the TCO process. Firstly, the CEO must ensure that any TCO application is not for goods specified in section 269SJ, which are ineligible for tariff concessions. Upon receiving an application, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also consider whether the application meets the core criteria, including verifying the absence of substitutable goods produced in Australia. Additionally, the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken before the registration date.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations may lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act could potentially result in civil or criminal sanctions depending on the nature and severity of the violation. Penalties for breaches of customs regulations can include fines, imprisonment, or both, with the exact penalties determined by the court based on the circumstances of the case. For instance, under the Customs Act, offences can attract significant fines and imprisonment terms, which may vary based on the severity and intent behind the breach.