EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708757
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.
Hunt Textiles Pty Ltd applied for a TCO in respect of certain combed cotton yarns on 05 June 2007.
Instrument
TCO No 0708757 was made on 24 August 2007. It declares that those certain combed cotton 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. 0708757 is taken to have come into force on 05 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 Tariff Concession Instrument No. 0708757, enacted under the Customs Act 1901, aims to facilitate tariff concessions for specific goods, thereby addressing the need for reduced customs duties on particular imports. This legislative instrument was introduced to provide relief for businesses by allowing the Chief Executive Officer of Customs to grant tariff concessions on goods, provided they meet specific criteria. The Tariff Concession Order (TCO) No. 0708757 was established following an application by Hunt Textiles Pty Ltd for certain combed cotton yarns. The instrument was effective from 5 June 2007, the date the application was lodged, and it declared that the combed cotton yarns in question are subject to a zero percent duty rate, down from the general rate of 5%. The instrument was made without any objections, as no submissions were received in response to the published notice inviting comments on the application. This legislative measure seeks to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0708757, which amends the Customs Act 1901, applies to entities and individuals seeking tariff concessions on specific goods, namely certain combed cotton yarns. This Act operates within the Commonwealth jurisdiction and its scope includes the process by which the Chief Executive Officer of Customs can grant tariff concessions if certain criteria are met. These criteria include the absence of substitutable goods produced in Australia and the goods not being specified in section 269SJ of the Act. The application process involves a public notice in the Gazette to invite objections, as mandated by subsection 269K(1) of the Act, and in this case, no objections were received. The concession is effective from the date the application was lodged, 05 June 2007, under subsection 269S(1) of the Act. It is important to note that the Tariff Concession Order does not retroactively affect any rights or impose liabilities for actions taken before its registration, thereby protecting the interests of all parties except the Commonwealth.
Key Provisions
The main operative sections of this legislation concern the process and conditions for making Tariff Concession Orders (TCO) under the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, while section 269C stipulates that such an 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. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written order (TCO). In this case, TCO No. 0708757 was made on 24 August 2007, declaring that certain combed cotton yarns are subject to a TCO, with a duty rate of free, as opposed to the general rate of 5%.
The obligations imposed by the Act on the parties involved are straightforward. For applicants like Hunt Textiles Pty Ltd, the primary obligation is to ensure that the application for a TCO is valid and meets the core criteria outlined in section 269C. The CEO, on the other hand, must assess the application to determine if it meets these criteria, and if so, issue the TCO. Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO, although no such submissions were received in this instance.
In terms of the consequences for breaches or non-compliance, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for breaches of the TCO provisions. However, the general legal framework in Australia provides that breaches of legislative requirements can result in civil or criminal penalties depending on the severity and intent of the breach. For instance, failure to comply with customs regulations can lead to fines, seizures of goods, and potential criminal charges. In the context of this legislation, non-compliance with the terms of a TCO, such as incorrectly claiming tariff concessions, could result in similar penalties, including financial penalties and legal action.