EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825386
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 Ltd applied for a TCO in respect of certain polyester cotton ring spun yarn on 07 August 2008.
Instrument
TCO No 0825386 was made on 31 October 2008. It declares that those certain polyester cotton 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. 0825386 is taken to have come into force on 07 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 was enacted by the Commonwealth Parliament to facilitate trade and provide for the collection of customs duties. The legislation was introduced to address the need for a comprehensive framework governing the importation and exportation of goods, including the regulation of customs duties. Part XVA of the Customs Act 1901 introduces the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. The objective of this scheme is to provide tariff concessions on certain goods, thereby promoting trade by reducing the cost of imported goods for consumers. Tarscot Templeton Carpets Pty Ltd applied for a TCO in respect of certain polyester cotton ring spun yarn, which was subsequently granted on 31 October 2008, following the CEO's satisfaction that no substitutable goods were produced in Australia in the ordinary course of business. The TCO No. 0825386 resulted in the goods being subject to a free rate of duty, down from the general rate of 5%. The TCO came into force on the date of the application, 07 August 2008, and importers of the affected goods may apply for a refund of duty on goods imported since that date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities seeking tariff concessions for specified goods, ensuring that these goods are not substitutes for products already manufactured within Australia and are used in a manner corresponding to the intended use of the imported goods. The application process necessitates that the CEO assesses whether the application aligns with the core criteria, primarily focusing on the absence of substitutable goods produced domestically. If the CEO approves the application, a written TCO is issued, reducing the customs duty for the specified goods. This legislation encompasses a national jurisdiction, influencing customs duties across Australia. Notably, the Act does not apply to certain goods outlined in section 269SJ, which are explicitly excluded from tariff concessions. The commencement of a TCO is effective from the date the application is lodged, providing immediate benefit to importers by potentially allowing them to apply for a refund of duties paid on imports of the specified goods since the effective date of the concession.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0825386, made under the Customs Act 1901, include section 269C which sets out the core criteria for a Tariff Concession Order (TCO). This section mandates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Section 269P(3) requires the Chief Executive Officer of Customs (the CEO) to make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies if satisfied that the application meets the core criteria. The instrument, TCO No. 0825386, specifies that certain polyester cotton ring spun yarn is subject to a free rate of duty instead of the general rate of 5% (s 269P(3)).
The obligations imposed by the Act on parties, such as Tascot Templeton Carpets Pty Ltd, include ensuring that the goods in question are not substitutable by goods produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting submissions on the TCO application, which, in this case, did not receive any responses (s 269K(1)). Furthermore, the Act ensures that the TCO does not affect the rights of any person adversely as at the date of registration (s 269S(1)).
In terms of potential consequences for breaches of the Act, it is important to note that there are no specific offences or penalties outlined in the explanatory statement. However, the Act does provide mechanisms for the CEO to assess applications and make TCOs based on the specified criteria. If an application does not meet the core criteria, the CEO is not required to make a TCO, and thus, the applicant would not benefit from the reduced duty rate. Additionally, any person adversely affected by the TCO could potentially seek legal recourse, although this is not explicitly detailed in the explanatory statement.
In conclusion, the Tariff Concession Instrument No. 0825386 outlines the process and criteria for granting tariff concessions on certain goods, ensuring that they do not adversely affect the rights of any person. The obligations of applicants and the CEO are clearly defined, and while the explanatory statement does not detail specific penalties for breaches, the Act provides a framework for assessing and implementing tariff concessions.