EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712636
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 spun yarns on 8 August 2007.
Instrument
TCO No 0712636 was made on 12 October 2007. It declares that those certain spun 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. 0712636 is taken to have come into force on 8 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 Tariff Concession Instrument No. 0712636, enacted in 2007 under the Customs Act 1901, addresses the problem of ensuring that certain goods imported into Australia receive preferential tariff treatment, thereby supporting industry competitiveness and consumer affordability. The Act was enacted by the Parliament of Australia with the policy objective of facilitating the import of goods that are not produced domestically by providing tariff concessions. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions for goods where no substitutable goods are produced in Australia, thereby ensuring that the application of a lower rate of customs duty supports industries reliant on imported materials. The Tariff Concession Order No. 0712636, effective from 8 August 2007, applies to certain spun yarns, providing a duty-free rate for these goods under item 50 of Schedule 4 to the Customs Tariff Act 1995, while ensuring that no existing rights or liabilities are adversely affected.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) to certain goods, allowing for a lower rate of customs duty. This mechanism is governed under Part XVA of the Act, where the Chief Executive Officer of Customs (CEO) has the authority to make TCOs upon meeting specific criteria. A TCO can be applied for by any person, and it applies to goods specified in the application, provided they are not restricted under section 269SJ of the Act. The CEO must ensure that no substitutable goods, as defined by sections 269D and 269E of the Act, are produced in Australia on the date the application is lodged. The application process requires the CEO to publish a notice in the Gazette inviting objections, though no submissions were received in this case. The TCO, once issued, takes effect from the date the application was lodged, and it does not adversely affect existing rights or impose new liabilities on any person except the Commonwealth. Importers of the affected goods can apply for duty refunds under the Regulations.
Key Provisions
The Customs Act 1901 (the Act) sets out the framework for Tariff Concession Orders (TCOs), which are orders that can apply a lower rate of customs duty to certain goods (sections 269F, 269C, and 269P). An application for a TCO can be made by any person under section 269F, provided the goods in question are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The Chief Executive Officer of Customs (the CEO) must then determine whether the application meets the core criteria, which is defined in section 269C as the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. In this case, Macquarie Textiles Group Ltd applied for a TCO in respect of certain spun yarns on 8 August 2007, and the CEO was satisfied that no substitutable goods were produced in Australia, leading to the creation of Tariff Concession Order No. 0712636 on 12 October 2007.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to make a written order (TCO) if the application meets the core criteria (section 269P). Additionally, as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice. The TCO itself is taken to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)), which in this case is 8 August 2007.
In terms of the consequences of breach, the Act does not specify any offences or penalties for failing to comply with the provisions related to TCOs. However, it is important to note that 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 (subsection 269S(3)). In this case, the rights of importers will be beneficially affected, as they 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, under paragraph 126(1)(r) of the Regulations. The TCO also does not impose any liabilities on any person.