EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708764
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 yarns on 05 June 2007.
Instrument
TCO No 0708764 was made on 24 August 2007. It declares that those certain acrylic 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. 0708764 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 was enacted to facilitate the regulation and administration of customs duties in Australia. It provides the legislative framework within which Tariff Concession Orders (TCOs) can be made, allowing for lower rates of customs duty on certain goods. The Act addresses the gap by providing a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on goods where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0708764 was introduced by the Parliament of Australia, with the primary objective of ensuring that tariff concessions are granted in accordance with the established criteria, thereby facilitating trade and economic efficiency by reducing the cost of imported goods. This particular instrument, made on 24 August 2007, granted a tariff concession to Hunt Textiles Pty Ltd for certain acrylic yarns, setting their duty rate to free, effective from the date the application was lodged, 05 June 2007.
Scope and Application
The Tariff Concession Instrument No. 0708764, issued under the Customs Act 1901, pertains to the application and administration of tariff concession orders for specific goods, in this case, certain acrylic yarns, and is applicable to Hunt Textiles Pty Ltd. The Act applies to individuals or entities that meet the criteria for tariff concessions, namely those who apply for and receive a concession on the duty applied to specific imported goods, provided these goods are not substitutes for those produced in Australia and no such goods are produced domestically. The geographic reach of the Act is national, as it operates under the Commonwealth’s authority. However, it is important to note that the Act excludes certain goods specified in section 269SJ, which cannot be subject to a tariff concession order. The application process involves scrutiny by the Chief Executive Officer of Customs, who must be satisfied that the application meets the core criteria set out in the Act. The instrument extends its application through subordinate instruments such as regulations, which detail the specific processes and conditions under which tariff concessions are granted.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0708764, issued under the Customs Act 1901, concern the process of applying for and granting Tariff Concession Orders (TCOs) (sections 269F, 269C, 269P(3)). Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ. Section 269C outlines the core criteria that the CEO must be satisfied with before issuing a TCO, namely that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the core criteria are met, section 269P(3) mandates the CEO to make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must submit a valid TCO application, ensuring that it does not pertain to goods specified in section 269SJ. The CEO is obligated to assess the application against the core criteria specified in section 269C and, if satisfied, issue a TCO as per section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who may have reasons why the TCO should not be made. Once a TCO is issued, it comes into force on the day the application was lodged, as per subsection 269S(1).
Any breach of the provisions of the Customs Act 1901, including the failure to adhere to the conditions for issuing a TCO, can result in civil or criminal penalties. While the specific penalties for breaches are not detailed in the explanatory statement, it is known that the Act generally allows for substantial fines and, in severe cases, imprisonment for breaches involving fraud or deliberate contraventions. The exact penalties would be determined based on the nature and severity of the breach, in accordance with the relevant sections of the Customs Act and other applicable legislation.