EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812380
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.
Albany International Pty Limited applied for a TCO in respect of certain polypropylene and polyamide spun yarn on 12 June 2008.
Instrument
TCO No 0812380 was made on 15 August 2008. It declares that those certain polypropylene and polyamide spun 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. 0812380 is taken to have come into force on 12 June 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, provides a framework for the administration of customs and excise duties, including a mechanism for tariff concession orders (TCOs) under Part XVA. This part of the Act was introduced to address the need for the Chief Executive Officer of Customs (CEO) to have the authority to grant tariff concessions on certain imported goods, thereby promoting trade and economic efficiency by reducing customs duties on goods where suitable domestic alternatives do not exist. In line with section 269F of the Act, businesses can apply for these concessions, which are subject to the CEO’s assessment against the core criteria outlined in sections 269C, 269B, and 269D. The policy objective of this legislative scheme is to facilitate smoother trade flows by offering duty-free status to goods for which no substitutable Australian-made alternatives are available, thereby enhancing the competitiveness of these goods in the domestic market.
Scope and Application
The Tariff Concession Instrument No. 0812380 under the Customs Act 1901 applies specifically to certain polypropylene and polyamide spun yarn as designated by Albany International Pty Limited, which successfully applied for a Tariff Concession Order (TCO) on 12 June 2008. This legislation allows for a lower rate of customs duty on goods that are the subject of a TCO, provided they meet the core criteria set out in section 269C of the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. The CEO of Customs was satisfied with the application and subsequently issued the TCO on 15 August 2008, reducing the duty rate from the general 5% to free. The TCO applies nationally and benefits importers who can now apply for a refund of duty on these goods from the date the TCO was taken to have come into force, without imposing any liabilities on any person under the Act. The Act does not extend to goods specified in section 269SJ of the Act, which are ineligible for TCOs.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0812380, which pertains to the Customs Act 1901, establish a framework for the application, consideration, and granting of Tariff Concession Orders (TCOs). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the CEO finds that the application is not for goods that cannot be subject to a TCO (as per section 269SJ), they must determine whether the application meets the core criteria outlined in section 269C. The core criteria require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties or entities it governs are primarily on the CEO. The CEO must assess whether an application meets the core criteria, which involves determining if there were no substitutable goods produced in Australia at the time the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order that specifies the goods subject to the TCO and the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be made.
In terms of breaches, the Act does not explicitly outline specific offences or penalties for non-compliance with the TCO process itself. However, it does specify the consequences of making a TCO where it should not have been made. Such an action could lead to legal challenges, and the entity responsible might be subject to civil or criminal proceedings depending on the circumstances and any additional legislative provisions that may apply. The general implication is that any improper or erroneous granting of a TCO could potentially lead to financial penalties or legal action, particularly if it results in financial loss to the Commonwealth or another party. The precise penalties would depend on the nature and extent of the breach, as well as any applicable laws or regulations.