EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804387
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.
Turrella Textiles Pty Ltd applied for a TCO in respect of certain air jet textured continuous filament on 19 March 2008.
Instrument
TCO No 0804387 was made on 13 June 2008. It declares that those certain air jet textured continuous filament 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. 0804387 is taken to have come into force on 19 March 2008.
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, addresses the need to regulate the import and export of goods by providing a framework for the imposition of customs duties. One of its components, Part XVA, specifically facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism was introduced to provide tariff concessions on certain goods, thereby promoting trade and economic efficiency by reducing the cost of imported goods for businesses. Tariff Concession Instrument No. 0804387 was made on 13 June 2008, following an application by Turrella Textiles Pty Ltd for a TCO on certain air jet textured continuous filament yarns. The instrument declares that these goods are subject to a zero rate of duty, effectively offering a tariff concession where none of the substitutable goods are produced in Australia. The policy objective of this instrument is to support Australian industries by ensuring that certain imported goods are not subjected to customs duties, thereby potentially lowering production costs and improving competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0804387, issued under the Customs Act 1901, applies to the specific goods, namely certain air jet textured continuous filament, that are the subject of the instrument. This legislation allows for a concession on the customs duty applicable to these goods, reducing the general rate of duty from 5% to free, provided that the application for the tariff concession order (TCO) meets the core criteria as specified in the Act. The Act applies to any person or entity seeking a tariff concession for goods not produced in Australia in the ordinary course of business, and which do not fall under the list of excluded goods specified in section 269SJ. The geographic and jurisdictional reach of this legislation is national, as it falls under the Commonwealth's authority to regulate customs duties. There are no stated exclusions or exemptions within this particular instrument, although the Act itself excludes certain goods from being subject to a TCO. The application of this Act may be extended or restricted through subordinate instruments, such as regulations, which can further define the scope and conditions of tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901 in this context are sections 269C, 269F, 269P, and 269S. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. If the application is deemed valid and meets the criteria outlined in section 269C, the CEO must make a TCO, which is a written order specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). This TCO will then come into force on the day the application was lodged as per section 269S.
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily directed towards the CEO of Customs. When an application for a TCO is received, the CEO must assess whether it meets the core criteria, particularly ensuring that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the application is valid, the CEO must publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). The CEO is also obligated to make a TCO if the application meets the criteria, as specified in section 269P(3). For applicants, the requirement is to submit a valid application that meets the outlined criteria.
The Customs Act 1901, in conjunction with the Customs Tariff Act 1995, establishes a framework for imposing offences, penalties, or civil/criminal consequences for breaches of its provisions. However, the specific penalties for non-compliance with TCOs or related duties are not detailed in the explanatory statement provided. Typically, breaches of customs regulations can result in fines or other penalties as stipulated in the relevant sections of the Customs Act 1901 and other associated regulations. The penalties can vary depending on the nature and severity of the breach, with potential maximum penalties being determined by the specific offence under the Act. The Act also allows for civil actions or criminal prosecutions in cases of significant non-compliance or fraudulent activities.