EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712195
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.
Macquarie Textiles Group Ltd applied for a TCO in respect of certain polyester and wool yarns on 2 August 2007.
Instrument
TCO No 0712195 was made on 19 October 2007. It declares that those certain polyester 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 0%.
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. 0712195 is taken to have come into force on 2 August 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 by the Australian Parliament and provides the legal framework for the administration of customs and excise duties in Australia. Part XVA of the Act introduced a scheme allowing for the creation of Tariff Concession Orders (TCOs), which provide for reduced customs duty rates on certain goods. The policy objective of this scheme is to provide relief to industries by reducing the cost of imported goods, thus fostering economic growth and competitiveness. TCO No. 0712195, made on 19 October 2007, is an example of such a concession, applying to certain polyester and wool yarns, reducing the duty rate from 5% to 0%. This instrument was introduced in response to an application by Macquarie Textiles Group Ltd and was made after consultation, although no submissions were received against the concession. The TCO came into effect on 2 August 2007, the date the application was lodged, and it does not disadvantage or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0712195 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been applied and granted by the Chief Executive Officer of Customs. The Act pertains to the process by which a TCO can be applied for and granted, specifically targeting goods for which there are no substitutable goods produced in Australia in the ordinary course of business. The application of the Act is national in scope, applying across all jurisdictions within Australia, as it is a Commonwealth Act. However, the application is restricted to goods specified in the Tariff Concession Orders, and it does not apply to goods listed in section 269SJ of the Act, which are ineligible for such concessions. The TCO in question pertains to certain polyester and wool yarns, for which the rate of duty has been reduced from 5% to 0%, benefiting the importers of these goods by potentially allowing them to claim a refund of duty on imports made since the effective date of the TCO. The TCO does not impose any new liabilities on any person and does not affect the rights of any person as at the date of registration of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901 concerning Tariff Concession Orders (TCOs) are sections 269F, 269C, 269B, 269D, 269E, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application meets the core criteria specified in section 269C, the CEO must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The core criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269B, 269D, and 269E.
The Customs Act 1901 imposes several obligations and requirements on parties applying for a TCO and the CEO. The applicant must ensure that the application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must review the application to determine if it meets the core criteria set out in section 269C. If satisfied, the CEO must make a written TCO and publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. In this case, Macquarie Textiles Group Ltd applied for a TCO for certain polyester and wool yarns, and the CEO, after verifying the core criteria, issued TCO No. 0712195.
The Act also outlines potential consequences for breaches of its provisions, although specific offences, penalties, or civil/criminal consequences for non-compliance with TCOs are not detailed in the explanatory statement. Typically, breaches of customs regulations may result in fines, imprisonment, or both, depending on the severity and intent of the breach. However, the explanatory statement does not provide specific maximum penalties for breaches related to TCOs. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person, other than the Commonwealth, in respect of anything done or omitted to be done before the date of registration.