EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718340
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.
DPK Australia Pty Limited applied for a TCO in respect of certain modal yarn single ply on 25 October 2007.
Instrument
TCO No 0718340 was made on 31 January 2008. It declares that those certain modal yarn single ply 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. 0718340 is taken to have come into force on 25 October 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 regulation of imports and exports, including the imposition of customs duty on imported goods. A significant feature of the Act is the provision for Tariff Concession Orders (TCOs), which can reduce or eliminate customs duty on certain goods. Enacted by the Australian Parliament, this Act aims to facilitate international trade by providing tariff relief for specific goods, thereby encouraging the importation of goods that are not produced domestically or for which there are no substitutable domestic products. The instrument F2008L00320, which is Tariff Concession Instrument No. 0718340, was introduced to address the specific need for tariff concessions on certain modal yarn single ply, as requested by DPK Australia Pty Limited. The policy objective was to ensure that no substitutable goods were produced in Australia at the time of the application, thereby justifying the concession and promoting the import of these goods.
Scope and Application
The Customs Act 1901, under its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who may reduce the rate of customs duty on specific goods upon application. The Act applies to any individual or entity that seeks a tariff concession for goods not specified in section 269SJ, which lists goods ineligible for TCOs. The legislation operates nationally, as it is a Commonwealth Act, affecting all states and territories within Australia. An application for a TCO must meet core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the application date. If these conditions are met, the CEO is mandated to issue a written order specifying the reduced duty rate for the goods in question. Exemptions and exclusions are limited to the goods listed in section 269SJ, and any application that does not meet the core criteria will not result in a TCO. The TCOs are subject to further regulation through subordinate instruments which may detail specific conditions and criteria for applications.
Key Provisions
The main operative sections of the Customs Act 1901, in the context of Tariff Concession Orders (TCOs), are section 269F, which allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a TCO (s 269F); section 269C, which establishes that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C); and section 269P, which stipulates that if the CEO is satisfied that a TCO application meets the core criteria, a written order must be made (s 269P). The instrument in question, TCO No. 0718340, declares that certain modal yarn single ply are goods to which item 50 of Schedule 4 to the Tariff applies, and the general rate of duty on these goods is 5% (s 269P(3)).
The Customs Act 1901 imposes several obligations and requirements on the parties and entities it governs. Firstly, under section 269F, a person may apply to the CEO for a TCO in respect of goods. The CEO must then assess the application against the core criteria outlined in section 269C, ensuring that the application is not in respect of goods specified in section 269SJ, which sets out those goods that cannot be subject to a TCO. If the CEO is satisfied 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 (s 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission (s 269K(1)).
The Customs Act 1901 also includes provisions for penalties and consequences in the event of a breach. However, the explanatory statement provided does not detail specific offences, penalties, or civil/criminal consequences for breach of the TCO provisions. Generally, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach. The maximum penalties for specific offences would be detailed in the relevant sections of the Customs Act 1901 and associated regulations.