EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824639
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.
Tascot Templeton Carpets Pty Limited applied for a TCO in respect of certain polyester ring spun yarn on 04 August 2008.
Instrument
TCO No 0824639 was made on 24 October 2008. It declares that those certain polyester ring 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. 0824639 is taken to have come into force on 04 August 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise duties in Australia. This Act was introduced to address the need for a structured approach to the administration and collection of customs duties, ensuring that the import and export of goods are managed efficiently and fairly. The Explanatory Statement for Tariff Concession Instrument No. 0824639, issued under the Customs Act, further elaborates on the scheme for Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on specified goods. The policy objective, as outlined in the Act, is to facilitate the import of goods that are not produced domestically, thereby benefiting importers and supporting industries that rely on imported raw materials or components. The CEO of Customs has the authority to grant these concessions, provided the application meets the core criteria stipulated in the Act. This instrument ensures that the rights of importers are protected and that the concession does not impose any liabilities on non-Commonwealth persons.
Scope and Application
The Tariff Concession Instrument No. 0824639 under the Customs Act 1901 applies to goods specifically identified in the application made by a person or entity seeking tariff concessions. The legislation allows for a lower rate of customs duty for goods that meet the criteria set forth in the Act, provided that the goods are not excluded by section 269SJ of the Customs Act 1901. The application process involves the Chief Executive Officer of Customs determining whether the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria, a Tariff Concession Order (TCO) is issued, granting the specific goods the benefit of a reduced duty rate. The geographic reach of this Act is national, as it pertains to the federal Customs Act 1901. The application of the TCO does not disadvantage any person, except for the Commonwealth, nor does it impose liabilities on any person for actions taken prior to the registration of the TCO. The commencement of the TCO is effective from the date the application was lodged, in this case, 4 August 2008. The TCO allows importers to apply for a refund of duty on goods imported from the commencement date.
Key Provisions
The Customs Act 1901, through its Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be made by any person under section 269F, provided the goods in question are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria outlined in section 269C. If the application is deemed to meet these criteria, the CEO is obligated to make a written order (TCO) under section 269P(3). The TCO in this instance, No. 0824639, was made on 24 October 2008 and declared that certain polyester ring spun yarn are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. For the applicant, it requires the submission of a valid application that meets the core criteria (s 269C). For the CEO, it mandates the publication of a notice in the Gazette inviting submissions from any interested party who might oppose the TCO (s 269K(1)). Once the CEO is satisfied that the application meets the core criteria and no objections are received, the CEO must make the TCO (s 269P(3)). The CEO must also ensure that the rights of third parties are not adversely affected by the TCO (s 269S(1)).
There are specific civil and criminal consequences for breaches of the Act. While the explanatory statement does not detail specific offences under the Customs Act 1901, breaches of related provisions can result in penalties. For instance, under section 251 of the Act, a person who knowingly makes a false statement in a document related to the importation of goods can be subject to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, under section 252, a person who wilfully contravenes a provision of the Act can incur a penalty of up to 22,200 penalty units or imprisonment for up to ten years, or both. These penalties underscore the importance of compliance with the Act's provisions.