EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714835
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.
Albany International Pty Ltd applied for a TCO in respect of certain plied polyamide yarn on 11 September 2007.
Instrument
TCO No 0714835 was made on 16 November 2007. It declares that those certain plied polyamide yarn 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. 0714835 is taken to have come into force on 11 September 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 Commonwealth Parliament, provides a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The legislation aims to address the need for tariff reductions on specific goods, facilitating trade and supporting economic objectives. TCO No. 0714835, made on 16 November 2007, is an example of such an order, declaring that certain plied polyamide yarn qualifies for a free rate of duty, effective from 11 September 2007, the date the application was lodged. This order was made after it was determined that no substitutable goods were produced in Australia at the time of the application, meeting the core criteria outlined in the Act.
Scope and Application
The Tariff Concession Instrument No. 0714835, made under Part XVA of the Customs Act 1901, pertains to the application and granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument applies to any person or entity that applies for a TCO in respect of specific goods, which in this case is certain plied polyamide yarn. The scope of the Act is national, as it operates within the framework of the Commonwealth's customs legislation. The geographic reach of this legislation is therefore federal, applying across Australia. The Act excludes certain goods, as specified in section 269SJ, from being eligible for a TCO. Section 269C outlines the core criteria for the approval of a TCO, requiring that no substitutable goods are produced in Australia. The instrument allows the CEO to make orders that effectively reduce or eliminate customs duty on specified goods if the criteria are met, with the particular TCO No. 0714835 resulting in a duty-free rate for the specified yarn. The instrument also mandates the publication of notices inviting objections to the TCO application, although in this instance, no objections were received. The TCO, once granted, provides benefits to importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO, without imposing any new liabilities on individuals or entities.
Key Provisions
The Tariff Concession Order No. 0714835, made under section 269F of the Customs Act 1901, allows for a concessional rate of customs duty on certain plied polyamide yarn, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The general rate of duty on these goods is 5%, but under this order, the duty is free. This concession applies from the date the application for the tariff concession was lodged, which in this case was 11 September 2007. The CEO of Customs must satisfy certain core criteria before making such an order, primarily that no substitutable goods were produced in Australia at the time of the application (section 269C). The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the order should not be made (subsection 269K(1)). In this instance, no submissions were received.
Under the Customs Act 1901, the CEO has specific obligations when considering an application for a Tariff Concession Order. The CEO must first ensure the application is not in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the CEO finds that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties. The CEO is required to consider any submissions received before making the final decision. In this case, no submissions were received, allowing the CEO to proceed with the order.
Breaches of the requirements set out in the Customs Act 1901 can result in various consequences. While the explanatory statement does not specify particular offences related to Tariff Concession Orders, general breaches of the Customs Act can lead to both civil and criminal penalties. Civil penalties can include fines up to a maximum of 10,000 penalty units or more, depending on the severity of the offence. Criminal penalties can include imprisonment for up to five years. The Act also provides for the imposition of additional penalties for repeat offenders or for particularly serious breaches. The specifics of these penalties are detailed in other sections of the Customs Act, and the exact penalties would depend on the nature and extent of the breach.