EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711895
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.
Boorowa Merino Breeders Association Incorporated applied for a TCO in respect of certain worsted spun wool yarn on 24 July 2007.
Instrument
TCO No 0711895 was made on 08 October 2007. It declares that those certain worsted spun 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. 0711895 is taken to have come into force on 24 July 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. 0711895 was enacted under the Customs Act 1901 with the purpose of addressing a gap in tariff concessions for certain goods. This legislation was introduced to facilitate tariff reductions for specific products not produced in Australia, thereby encouraging importation and potentially benefiting the market. The Customs Act 1901, overseen by the Parliament of Australia, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide reduced customs duty rates on specified goods, provided that no substitutable goods are produced domestically. In this instance, the instrument was introduced following an application from the Boorowa Merino Breeders Association Incorporated for tariff concessions on certain worsted spun wool yarns. The instrument, effective from 24 July 2007, aims to lower the duty rate for these specific goods from 5% to free, aligning with the policy objective of facilitating trade and economic benefits by removing duty barriers for non-domestically produced goods.
Scope and Application
The Tariff Concession Instrument No. 0711895 under the Customs Act 1901 applies to specific worsted spun wool yarn goods and is pertinent to entities and individuals involved in the importation of these goods. This instrument was enacted to facilitate a tariff concession for these goods by reducing the duty rate from the general 5% to free. It applies to any entity or individual who imports the specified goods after the commencement date of 24 July 2007. The scope of the Act is national, as it falls under the Commonwealth's authority, thereby impacting all states and territories within Australia. The application process involves an assessment by the Chief Executive Officer of Customs to ensure that the goods in question are not substitutable by any domestically produced goods, in line with the criteria set out in section 269C of the Act. The Act does not affect any pre-existing rights of parties other than the Commonwealth and does not impose any liabilities on importers or other stakeholders for actions taken before the instrument's effective date.
Key Provisions
The Tariff Concession Order (TCO) No. 0711895, issued under section 269P of the Customs Act 1901, is a significant piece of legislation aimed at reducing customs duty on specific goods. The order, which applies to certain worsted spun wool yarn, was made on 8 October 2007 and came into effect on 24 July 2007, the date on which the application was lodged (subsection 269S(1)). This TCO declares that the specified wool yarns are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the general duty rate of 5% being reduced to free. The key provision of this order is the reduction of customs duty to zero for these specific goods, provided no substitutable goods were produced in Australia on the date the application was lodged (section 269C).
Entities governed by this Act must ensure that the goods they are dealing with meet the criteria set out in the TCO. The primary obligation is to verify that the goods are the specific worsted spun wool yarns covered by the order and to apply for the tariff concession if applicable. Additionally, under section 269K(1), the Chief Executive Officer of Customs (CEO) must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. In this instance, no submissions were received.
The Customs Act 1901 outlines potential consequences for non-compliance with the provisions of a TCO. While the explanatory statement does not explicitly state any criminal or civil penalties for breaching the terms of this specific TCO, general penalties for non-compliance with customs laws can include fines and imprisonment. The seriousness of the breach determines the specific penalties, with potential fines ranging from minor infractions to substantial penalties for serious or repeated violations. Furthermore, failure to adhere to the TCO requirements could result in the goods being subject to the general duty rate, thereby incurring additional costs for the importer.