EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715613
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 polyamide multifilament and polypropylene spun yarn on 19 September 2007.
Instrument
TCO No 0715613 was made on 30 November 2007. It declares that those certain polyamide multifilament and polypropylene spun 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 7.5%. 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. 0715613 is taken to have come into force on 19 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 was enacted to provide for the collection of customs duty and the regulation of the importation and exportation of goods in Australia. One of the mechanisms under this Act is the creation of Tariff Concession Orders (TCOs) to provide tariff relief for certain goods. The Tariff Concession Instrument No. 0715613, made under the authority of this Act, was introduced to address the need for tariff concessions for specific goods that are not produced in Australia and have no substitutable domestic goods. The instrument was created following an application by Albany International Pty Ltd for a TCO concerning certain polyamide multifilament and polypropylene spun yarn. The policy objective, as outlined in the explanatory statement, was to provide tariff relief for these goods by declaring them as subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced rate of duty from 7.5% to free. The instrument was published in the Gazette with an invitation for submissions, but none were received, and it came into effect on the date the application was lodged, 19 September 2007. The instrument does not affect any pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0715613, issued under the Customs Act 1901, applies specifically to goods that are subject to a Tariff Concession Order (TCO). The Act facilitates the granting of TCOs by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on specified goods. This instrument applies to entities or individuals who import or intend to import the specified goods, namely certain polyamide multifilament and polypropylene spun yarn, into Australia. The scope of the Act extends to ensuring that no substitutable goods are being produced in Australia at the time of application, thereby avoiding any adverse impact on local production. Geographically, the application of this legislation is national, encompassing all states and territories within Australia.
The TCO, once registered, applies retroactively to the date of the application, which in this case is 19 September 2007. The TCO does not affect any pre-existing rights or impose any liabilities on entities other than the Commonwealth. It is designed to benefit importers by potentially allowing them to claim a refund of duty for goods imported since the TCO's effective date. The Act provides mechanisms for public consultation, although in this instance, no submissions were received in response to the notice published in the Gazette. The scope of the Act can be further extended or clarified through subordinate instruments, which may provide additional details or specific conditions under which the TCO operates.
Key Provisions
The Customs Act 1901 establishes a scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269P(3)). These orders apply reduced customs duties to certain goods, which are specified in the order, as outlined in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The core criteria for approving a TCO application include ensuring that no substitutable goods are produced in Australia at the time the application is lodged (section 269C). In the case of Albany International Pty Ltd's application for a TCO on certain polyamide multifilament and polypropylene spun yarn, the CEO was satisfied that no substitutable goods were produced in Australia and issued TCO No. 0715613 on 30 November 2007, which took effect from 19 September 2007 (subsection 269S(1)).
The Act imposes obligations on applicants to ensure that their applications meet the core criteria and on the CEO to assess applications against these criteria (sections 269C, 269F). The CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO (subsection 269K(1)). The CEO did not receive any submissions regarding the TCO application for the yarn in question. Once a TCO is made, it provides a benefit to importers who can apply for a refund of duty on the goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can result in various consequences. Civil and criminal penalties may be imposed for breaches, including fines and imprisonment, although the specific penalties are not detailed in this particular TCO. The Act does not impose any liabilities on any person under the TCO, and it does not affect the rights of any person, other than the Commonwealth, as at the date of registration, in a way that would disadvantage that person or impose liabilities for actions taken before the TCO was registered.