EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718990
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.
Melbatex Pty Ltd applied for a TCO in respect of certain flame retardant yarns on 15 November 2007.
Instrument
TCO No 0718990 was made on 30 January 2008. It declares that those certain flame retardant 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 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. 0718990 is taken to have come into force on 15 November 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 for the regulation of customs and excise in Australia. Among its provisions, Part XVA introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme allows for a lower rate of customs duty on goods specified in a TCO. The instrument F2008L00466, known as Tariff Concession Instrument No. 0718990, was introduced to address the specific need for tariff concessions on certain flame retardant yarns, as applied by Melbatex Pty Ltd. The policy objective of this instrument is to provide tariff relief where no substitutable goods are produced in Australia, thereby encouraging the import of these specific goods and potentially benefiting Australian importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect on 15 November 2007.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of tariff concessions for specific goods via Tariff Concession Orders (TCOs), administered by the Chief Executive Officer of Customs (CEO). This legislation applies to any individual or entity seeking a reduction in customs duty for goods not produced in Australia and not specified as ineligible under section 269SJ of the Act. The geographic and jurisdictional scope of this Act is national, affecting all states and territories within Australia. The Act allows the CEO to issue a TCO if no substitutable goods are produced domestically and the application meets the criteria set out in section 269C. Notably, the Act does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date. Any person, other than the Commonwealth, can lodge a submission if they believe a TCO should not be granted, although in practice, such submissions are rare. The TCO No. 0718990, which became effective on 15 November 2007, granted tariff concessions for certain flame retardant yarns, reducing their duty from 5% to free.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer (CEO) of Customs can reduce the rate of customs duty on certain goods (s 269F). An individual or entity can apply to the CEO for a TCO if the goods in question are not listed in section 269SJ, which details goods that cannot be subject to a TCO (s 269C). The CEO must assess whether the application meets the core criteria, which include ensuring that on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C, s 269D, s 269E). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate (s 269P(3)).
The obligations imposed by the Act on the parties and entities it governs include the requirement for the CEO to evaluate TCO applications against the specified core criteria, ensuring that no substitutable goods were produced in Australia at the time of application (s 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties on whether a TCO should be made, and then consider these submissions before making a decision (s 269K(1)). In the case of TCO No. 0718990, the CEO assessed that the application from Melbatex Pty Ltd for certain flame retardant yarns met the core criteria and made the order, which came into effect on the date the application was lodged, 15 November 2007 (s 269S(1)). The CEO did not receive any submissions opposing the TCO.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act generally can result in civil or criminal penalties depending on the severity of the violation. For instance, providing false information in an application could potentially result in fines or imprisonment under other sections of the Customs Act or related legislation. The maximum penalties for such breaches are not specified in the explanatory statement but can vary widely based on the nature of the offence and the applicable laws. Importers can also seek a refund of duty on goods imported since the TCO came into effect under the Regulations, indicating that the Act aims to provide relief to those affected by the tariff changes.