EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712637
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 Limited applied for a TCO in respect of certain wool with solely mixed single or multiple ply containing 50% or more of bamboo fibre spun yarns on 08 August 2007.
Instrument
TCO No 0712637 was made on 12 October 2007. It declares that those certain wool with solely mixed single or multiple ply containing 50% or more of bamboo fibre 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. 0712637 is taken to have come into force on 08 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, enacted by the Parliament of Australia, includes provisions for the creation of Tariff Concession Orders (TCOs) under Part XVA. These TCOs provide for a lower rate of customs duty on specified goods, contingent on the absence of substitutable goods produced in Australia. This legislation addresses the need for tariff concessions to facilitate the importation of certain goods where no suitable domestic alternatives exist, thereby encouraging trade and economic efficiency. The Tariff Concession Instrument No. 0712637, issued on 12 October 2007, exemplifies this process by granting a duty-free concession for certain wool with at least 50% bamboo fibre content, following an application by Macquarie Textiles Group Limited. This measure was introduced to support the import of these specific goods, ensuring they are not subject to the general duty rate of 5%, and thus fostering competitive market conditions by allowing lower-cost imports.
Scope and Application
The Customs Act 1901, as explained in Tariff Concession Instrument No. 0712637, facilitates the application for Tariff Concession Orders (TCO) by individuals or entities seeking to reduce customs duty on specific goods. This process is applicable to goods that are not specified in section 269SJ of the Act, which excludes certain goods from eligibility for tariff concessions. The instrument applies to the goods in question, namely certain wool with solely mixed single or multiple ply containing 50% or more of bamboo fibre spun yarns, and provides that these goods are subject to a lower rate of customs duty, in this case, free duty as opposed to the general rate of 5%. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia. The Act allows for the CEO of Customs to make the final decision on whether an application for a TCO meets the core criteria, which involves assessing whether substitutable goods are produced in Australia in the ordinary course of business. This decision is subject to consultation where the CEO must publish a notice inviting submissions, though in this case, no submissions were received. The TCO does not impose any liabilities on any person and does not affect the rights of a person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the TCO's registration date.
Key Provisions
The Customs Act 1901, as amended, establishes a framework for Tariff Concession Orders (TCOs) through Part XVA. A TCO can be applied for by any person under section 269F, provided the goods in question are not those specified in section 269SJ, which are ineligible for such concessions. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. "Substitutable goods" are defined in section 269D, "ordinary course of business" in section 269E, and the specific definitions of these terms are crucial for determining eligibility for a TCO.
The obligations imposed by the Act on the Chief Executive Officer (CEO) of Customs are detailed and procedural. Upon receiving a TCO application, the CEO must first ensure it does not pertain to goods specified in section 269SJ. If the application is valid, the CEO must assess whether it meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the application date. Should the CEO find the application meets these criteria, they must issue a written TCO, as mandated by section 269P(3), declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act also outlines specific consequences for non-compliance and breach of its provisions. While the explanatory statement does not detail civil or criminal penalties directly, it is understood that breaches of the Customs Act 1901 can lead to significant legal consequences, including fines and imprisonment, depending on the severity of the breach. For instance, under section 275 of the Customs Act, individuals found guilty of offences related to the smuggling of goods or evading duty can face substantial penalties, reflecting the seriousness of non-compliance with customs regulations. Additionally, section 269T of the Act provides that any person who makes a false or misleading statement in an application for a TCO is subject to a penalty of up to five thousand penalty units, highlighting the importance of accuracy and integrity in the application process.
The instrument TCO No. 0712637, which was issued on 12 October 2007, demonstrates the application of these provisions. The Macquarie Textiles Group Limited applied for a TCO concerning certain wool products containing 50% or more of bamboo fibre spun yarns. The CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of the TCO. This concession reduced the duty on these goods from the general rate of 5% to free. The commencement of the TCO on 08 August 2007 meant that importers could benefit from this reduced duty rate, and the CEO's role in publishing notices and inviting submissions ensured transparency and accountability in the process.