EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721922
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.
Australian Weaving Mills Pty Ltd applied for a TCO in respect of certain single uncombed cotton yarn on 20 December 2007.
Instrument
TCO No 0721922 was made on 14 March 2008. It declares that those certain single uncombed cotton 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. 0721922 is taken to have come into force on 20 December 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, includes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). This mechanism is designed to address the need for tariff relief on certain goods, facilitating trade by reducing customs duty rates for those goods. The Customs Act 1901 allows for the CEO to issue TCOs if an application is received and the core criteria are met, specifically when no substitutable goods are produced in Australia in the ordinary course of business. The enactment of this legislation aims to ensure that Australian businesses can access imported goods at a reduced tariff rate, thereby supporting competitive pricing and market access. The Tariff Concession Instrument No. 0721922, made on 14 March 2008, exemplifies this process by granting a tariff concession on certain single uncombed cotton yarns, setting their duty rate to free, provided no objections were raised against the application.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person who can apply for a TCO for goods, provided those goods do not fall under the category specified in section 269SJ which are ineligible for tariff concessions. The application process requires that no substitutable goods, as defined under section 269D, were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a TCO is made, granting a lower rate of customs duty on the specified goods. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the associated customs duties. The Act does not impose any liabilities on individuals or entities other than the Commonwealth and does not affect the rights of any person as at the date of registration in relation to actions taken prior to the registration of the TCO. The TCO extends its benefits to importers by allowing them to apply for a refund of duty on goods imported from the date the TCO is taken to have come into force.
Key Provisions
The Tariff Concession Instrument No. 0721922, under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) for certain single uncombed cotton yarns. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided that these goods do not fall under section 269SJ, which lists items ineligible for TCOs. The CEO must then assess if the application meets the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Under section 269B, the Act defines 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the CEO determines that the application satisfies these criteria, they are obligated under subsection 269P(3) to issue a written TCO.
The obligations imposed by the Act on the CEO include publishing a notice in the Gazette as soon as practicable after accepting a TCO application as valid, as per subsection 269K(1). This notice invites any interested parties to lodge submissions with the CEO regarding the proposed TCO. In this case, the CEO did not receive any submissions in response to the published notice. Furthermore, under subsection 269S(1), a TCO is deemed to come into force on the day the application for the TCO was lodged. This means that TCO No. 0721922 is considered to have come into effect on 20 December 2007, the date Australian Weaving Mills Pty Ltd applied for the TCO.
The Act also stipulates that a TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, ensuring that no person (other than the Commonwealth) is disadvantaged or imposed with liabilities concerning actions taken before the date of registration. This principle is in line with the terms outlined in paragraph 126(1)(r) of the Regulations, which allows importers of such goods to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. Importantly, the TCO does not impose any liabilities on any person.
In terms of penalties and consequences for non-compliance, the Act does not specify particular offences or penalties related to breaches of TCO provisions. However, any misuse or non-compliance with the terms of the TCO could potentially lead to legal actions under the Customs Act 1901 or related legislation. The exact penalties would depend on the nature of the breach and could range from fines to more severe legal consequences.