EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719528
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 yarn of flame retardant on 15 November 2007.
Instrument
TCO No 0719528 was made on 29 January 2008. It declares that those certain yarn of flame retardant 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. 0719528 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 Tariff Concession Instrument No. 0719528, enacted in 2008, is a legislative measure introduced to address the need for tariff concessions under the Customs Act 1901. This instrument was developed to provide specific goods with a lower rate of customs duty, thereby encouraging trade and reducing costs for businesses that import these goods. The instrument was issued by the Chief Executive Officer of Customs (CEO), acting within the framework established by section 269F of the Customs Act 1901, which allows for the application of Tariff Concession Orders (TCOs) to certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The instrument applies to yarn of flame retardant, reducing the duty rate from 5% to free, effective from the date the application was lodged, 15 November 2007. The CEO published a notice in the Gazette inviting submissions regarding the TCO, but none were received. The policy objective of this instrument is to facilitate smoother import processes and enhance the competitive position of Australian businesses in the international market by offering tariff concessions on specific goods.
Scope and Application
The Customs Act 1901 applies to individuals and entities engaged in the importation of goods into Australia. Specifically, the Tariff Concession Orders (TCO) scheme under Part XVA of the Act allows for a lower rate of customs duty on certain goods, provided specific criteria are met. This scheme is administered by the Chief Executive Officer of Customs (CEO), who is responsible for determining the eligibility of goods for tariff concessions based on applications made under section 269F. A TCO is applicable to goods that are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. The application process requires that on the day of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E, and 269B of the Act. Once the CEO determines that an application meets the core criteria, a written order is issued under section 269P(3) of the Act, declaring the goods subject to a prescribed rate of duty in the Customs Tariff Act 1995. The process also includes a consultation period as mandated by section 269K(1) of the Act, during which the CEO invites submissions from any interested parties regarding the proposed tariff concession. The TCO becomes effective on the date the application was lodged, as per subsection 269S(1) of the Act, ensuring that the rights of importers are protected and they may be eligible for duty refunds under the Customs Regulations.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the provisions for Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided that the goods are not those specified in section 269SJ, which cannot be subject to a TCO. If the CEO determines that the application meets the core criteria, as set out in section 269C, they must make a written order declaring that the goods are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995. For example, in TCO No. 0719528, the CEO declared that certain yarn of flame retardant is subject to a free rate of duty, which contrasts with the general rate of 5% for such goods.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that the goods in question are not specified in section 269SJ and that the application meets the core criteria as defined in section 269C. The CEO, on the other hand, must review the application to ascertain if it complies with the core criteria and, if satisfied, must publish a notice in the Gazette inviting submissions from any interested parties. In this case, no submissions were received, which facilitated the issuance of TCO No. 0719528. Furthermore, the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before the TCO’s effective date.
Breaches of the provisions outlined in the Customs Act 1901 can result in both civil and criminal consequences. Specifically, section 269K mandates that the CEO must publish a notice in the Gazette to invite submissions, and failure to do so could be seen as a breach. Additionally, misuse of a TCO or misrepresentation in an application could lead to penalties under the Act. While the specific penalties are not detailed in the explanatory statement, breaches of customs legislation generally carry substantial fines and, in severe cases, imprisonment. The exact penalties would be determined by the relevant courts based on the nature and severity of the breach.