EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708761
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 acrylic and wool yarns on 05 June 2007.
Instrument
TCO No 0708761 was made on 24 August 2007. It declares that those certain acrylic and 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. 0708761 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework under which Tariff Concession Orders (TCOs) may be issued to lower the rate of customs duty on certain goods. The primary objective of Part XVA of the Act is to facilitate the import of goods that are not domestically produced, thereby encouraging trade and benefiting consumers through reduced costs. This legislative instrument addresses the gap in tariff regulation by allowing for the application of tariff concessions under specific criteria, ensuring that such concessions are granted only when no substitutable goods are produced in Australia. The introduction of TCO No. 0708761, effective from 5 June 2007, exemplifies this mechanism by applying a zero rate of duty to certain acrylic and wool yarns, following a determination by the Chief Executive Officer of Customs that no domestic substitutes were available. This specific measure was designed to ensure that the import of these yarns would not be hindered by prohibitive tariffs, thereby maintaining a competitive edge for Australian businesses that rely on such materials.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 0708761, applies to individuals and entities seeking tariff concessions on imported goods, effectively governing the process by which the Chief Executive Officer of Customs (CEO) can grant reduced customs duty rates. The legislation allows for applications by any person for a Tariff Concession Order (TCO) in respect of specific goods, provided those goods are not listed as ineligible under section 269SJ of the Act. The core criteria for granting a TCO, as outlined in sections 269C and 269D, require that no substitutable goods are produced in Australia at the time of application. This instrument, effective from 5 June 2007, applies nationally across Australia and does not impose any liabilities on persons other than the Commonwealth. The CEO's decision-making process includes publishing notices in the Gazette to invite submissions from interested parties, although in this case, no submissions were received. The instrument also ensures that the rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported from the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0708761, issued under section 269F of the Customs Act 1901 (the Act), provides for tariff concessions on certain goods, in this case, specific acrylic and wool yarns. The primary operative section, section 269C, stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. This means that the goods in question should not have an Australian alternative that can serve the same purpose, including design uses. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must issue a TCO, as outlined in section 269P(3). This TCO declares that the specified goods are subject to a lower rate of customs duty, in this instance, reducing it from the general rate of 5% to free duty.
The Act imposes certain obligations and requirements on the parties involved. Firstly, any person can apply for a TCO, but the CEO must ensure that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO is also mandated to publish a notice in the Gazette, as per subsection 269K(1), inviting any interested parties to submit objections if they believe the TCO should not be granted. The CEO must consider these submissions before making a final decision. Additionally, the CEO must ensure that the TCO does not disadvantage any person (other than the Commonwealth) or impose liabilities on them for actions taken before the TCO came into effect.
The Act outlines various consequences for breaches of its provisions. Under the Customs Act 1901, offences related to the misuse or fraudulent claims of tariff concessions can result in significant penalties. The specific penalties for breaches are not detailed in the explanatory statement but generally include fines and imprisonment, depending on the severity of the offence. Additionally, any person found to be in breach of the Act's provisions may face civil or criminal proceedings, which could further lead to penalties as prescribed by the relevant laws. The maximum penalties for such offences would be determined by the courts based on the specifics of each case and the applicable legal standards.