EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800673
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 0800673 was made on 14 March 2008. It declares that those certain single uncombed cotton 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 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.0800673 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 Australian Parliament, established the framework for Tariff Concession Orders (TCOs) under which the Chief Executive Officer of Customs (CEO) may apply lower rates of customs duty to specified goods. The problem this Act sought to address was the need for a mechanism to reduce the duty on certain imported goods, thereby facilitating trade and potentially benefiting the economy by making such goods more competitively priced against locally produced alternatives. This specific legislation, Tariff Concession Instrument No. 0800673, was introduced to provide a tariff concession for certain single uncombed cotton yarn, granting a free rate of duty on these goods previously subject to a 5% duty. The policy objective underpinning this measure is to support the importation of goods that are not produced domestically, thus enhancing market access and possibly reducing costs for businesses reliant on these imports.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) which allow for reduced customs duty rates on certain goods. This Act applies to individuals or entities that wish to apply for a TCO in respect of specific goods, provided those goods do not fall under the list of exclusions specified in section 269SJ. The Act mandates that the Chief Executive Officer of Customs (CEO) must evaluate whether the application for a TCO meets the core criteria, which primarily involve the absence of substitutable goods produced in Australia at the time the application is lodged. The scope of this Act is national, as it operates under the Commonwealth's jurisdiction. The TCO in question, No. 0800673, was applied for by Australian Weaving Mills Pty Ltd for certain single uncombed cotton yarn, and the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria. As a result, the TCO was issued, setting the duty rate for these specific goods at free, as opposed to the general rate of 5%. This concession is effective from the date the application was lodged, 20 December 2007, without retroactively affecting the rights of any person other than the Commonwealth.
Key Provisions
The Tariff Concession Order (TCO) No. 0800673, under the Customs Act 1901, provides a tariff concession for certain single uncombed cotton yarn. According to section 269F of the Act, a person may apply to the Chief Executive Officer of Customs (CEO) for such a concession. If the CEO determines that the application meets the core criteria (section 269C), they must make a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. In this case, the TCO specifies that these goods are subject to item 50 of Schedule 4, with the rate of duty being free, down from the general rate of 5%.
The Act imposes specific obligations on the CEO regarding the processing of TCO applications. Firstly, the CEO must ensure that the application is not in respect of goods specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. If the CEO is satisfied that the application meets the core criteria, they are required to make a written order. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit any objections to the TCO before it is made. In this case, no submissions were received in response to the published notice.
The TCO imposes no obligations on parties other than the Commonwealth. Importantly, it does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted before the date of registration. However, it does provide beneficial rights to 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).
There are no specific offences or penalties outlined in the Act for breaches related to the TCO itself. However, any breach of the Customs Act 1901 or the Customs Tariff Act 1995 could result in civil or criminal penalties. For instance, section 221 of the Customs Act 1901 provides for penalties for offences related to the importation or exportation of goods, including fines and imprisonment. The maximum penalties for such offences can vary depending on the nature and severity of the breach.