EXPLANATORY STATEMENT
Tariff Concession Instrument No. 07018565
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.
Ricky Richards Pty Ltd applied for a TCO in respect of certain fabric acrylic woven staple yarn on 30 October 2007.
Instrument
TCO No 0718565 was made on 19 April 2008. It declares that those certain fabric acrylic woven staple 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 10%. 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. 0718565 is taken to have come into force on 30 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, enacted by the Commonwealth Parliament, establishes a framework for the application of customs duties on imported goods. To address specific economic needs and encourage the import of certain goods, the Act allows for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce or waive customs duties. The instrument F2008L01567, TCO No. 0718565, is a response to an application by Ricky Richards Pty Ltd for a tariff concession on certain fabric acrylic woven staple yarn. The purpose of this TCO is to provide a tariff concession, making the rate of duty on these specific goods free, as no substitutable goods were produced in Australia at the time of the application. The instrument came into effect on the date the application was lodged, 30 October 2007, and does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 07018565 under the Customs Act 1901 applies to specific fabric acrylic woven staple yarn, as declared by the Chief Executive Officer of Customs (CEO) in response to an application by Ricky Richards Pty Ltd on 30 October 2007. The Act allows for the application of lower customs duty rates on goods not produced domestically and substitutable by imported goods, provided the application meets core criteria. The CEO's decision to grant the concession was based on the absence of substitutable goods produced in Australia, resulting in a tariff concession order (TCO) that effectively grants free duty on the specified yarn, down from the general rate of 10%. This concession applies nationally and came into force on the date of the application, 30 October 2007, without retroactive effect on prior transactions. The TCO does not disadvantage any party other than the Commonwealth and does not impose new liabilities, although it does entitle importers to duty refunds for goods imported since the TCO's effective date. The CEO's decision process included a public notice inviting submissions, none of which were received.
Key Provisions
Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, they must assess whether the application meets the core criteria set out in section 269C. The application meets these criteria if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. In the case of Ricky Richards Pty Ltd, the CEO made TCO No. 0718565 on 19 April 2008, declaring that certain fabric acrylic woven staple yarn are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, given that no substitutable goods were produced in Australia, resulting in a tariff concession from a 10% duty rate to free.
The obligations imposed by the Act on the parties include the requirement for applicants to ensure their applications are valid and meet the core criteria as outlined. The CEO must review these applications and make written orders if the criteria are met, as per section 269P(3). Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any person who may oppose the concession. In this instance, no submissions were received, facilitating the swift implementation of the TCO. The TCO No. 0718565 was deemed to have come into force on 30 October 2007, the date the application was lodged, according to subsection 269S(1).
The Act and the TCO establish clear consequences for non-compliance. If the CEO makes an order that does not meet the statutory criteria, the concession may be deemed invalid, potentially resulting in the imposition of the full duty rate on the goods. While the explanatory statement does not specify penalties for non-compliance with the TCO provisions, breaches of the Customs Act 1901 generally can lead to civil and criminal penalties. Civil penalties may include fines up to the statutory maximum, and criminal penalties can include imprisonment, reflecting the severity of non-compliance with customs regulations. The rights of importers are protected under paragraph 126(1)(r) of the Regulations, allowing them to apply for duty refunds on goods imported since the effective date of the TCO, ensuring that no person (other than the Commonwealth) is disadvantaged or imposed liabilities prior to the registration date.