EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718566
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 (Sales) Pty Ltd applied for a TCO in respect of certain fabric acrylic woven staple yarns on 30 October 2007.
Instrument
TCO No 0718566 was made on 19 April 2008. It declares that those certain fabric acrylic woven staple 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 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. 0718566 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 Parliament of Australia, provides a legislative framework for the imposition of customs duties and the facilitation of international trade. The Tariff Concession Instrument No. 0718566, issued under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods. This instrument was enacted to allow for a reduced rate of customs duty on certain goods, as determined by the Chief Executive Officer of Customs, provided certain criteria are met. This approach allows for flexibility in tariff regulation, thereby supporting economic efficiency and competitiveness in the import market. The policy objective is to enable a more streamlined and beneficial trade environment by reducing the financial burden on importers for specific goods that do not have local substitutes.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty to specified goods. This legislative framework is accessible to any person who can demonstrate that the goods they seek to have tariff concessions for are not produced domestically and are not excluded under section 269SJ of the Act. A TCO is contingent upon the CEO's satisfaction that no substitutable goods are being produced in Australia at the time of application and that the application meets the core criteria outlined in section 269C. This process includes a requirement for public notice and opportunity for objections, although in the case of TCO No. 0718566, no objections were received. The TCO applies nationally and does not affect pre-existing rights or impose liabilities on any individual or entity, though it does benefit importers by potentially allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of this legislation (sections 269C, 269B, 269D, 269E, 269F, 269P(3) and 269K(1)) set out the criteria and process for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO). Specifically, section 269F allows a person to apply for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Customs Act 1901. If the CEO is satisfied that the application meets the core criteria (section 269C), which include that no substitutable goods were produced in Australia in the ordinary course of business (sections 269B and 269D), the CEO must make a written order (section 269P(3)) that declares the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received in this case.
The obligations and requirements imposed by the Customs Act 1901 on the parties governed by this legislation are primarily on the CEO. The CEO must decide whether a TCO application meets the core criteria (section 269C) and, if satisfied, must make a written TCO (section 269P(3)). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (section 269K(1)), although this did not result in any submissions in this instance. The applicant, Ricky Richards (Sales) Pty Ltd, must ensure that their application for a TCO complies with the criteria set out in the Act and provide any necessary information to satisfy the CEO that the application meets these criteria.
For breaches of the Customs Act 1901, the legislation does not specify particular offences, penalties, or civil/criminal consequences for failure to comply with the TCO process. However, general provisions of the Customs Act 1901 apply, which could include fines or imprisonment for breaches of the Act. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration, except to beneficially affect the rights of importers who can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).