EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831406
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 polypropylene yarn on 16 September 2008.
Instrument
TCO No 0831406 was made on 12 December 2008. It declares that those certain air jet textured continuous polypropylene 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. 0831406 is taken to have come into force on 16 September 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, establishes a framework through which Tariff Concession Orders (TCOs) can be implemented by the Chief Executive Officer of Customs (CEO). This legislation aims to address the gap in providing tariff concessions for specific goods that are not produced domestically, thereby encouraging imports and reducing costs for consumers and businesses. TCO No. 0831406, introduced under this Act, specifically targets certain air jet textured continuous polypropylene yarn, allowing for a zero rate of duty as no substitutable goods were produced in Australia at the time of application. The policy objective is to ensure that such tariff concessions are granted fairly and transparently, following public consultation, which in this case did not yield any submissions opposing the concession. The TCO does not affect the rights of any person adversely and allows importers to apply for refunds of duties paid on the specified goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, through Part XVA, provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to persons or entities seeking tariff concessions for goods that are not produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it is a Commonwealth Act. The Act does not apply to goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The CEO is mandated to make a TCO if the application meets the core criteria, which include the absence of substitutable goods produced in Australia. The application process involves publishing a notice in the Gazette to invite submissions, although no submissions were received for TCO No. 0831406. The TCO becomes effective on the date the application is lodged, with no retroactive effect on the rights or liabilities of persons other than the Commonwealth. The TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Order No. 0831406, made under section 269F of the Customs Act 1901, applies to certain air jet textured continuous polypropylene yarn, providing a tariff concession that reduces the duty from 5% to free. This concession is contingent on the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C of the Act. The application must also meet the core criteria outlined in the Act, ensuring that the goods are not specified in section 269SJ, which lists goods ineligible for tariff concessions.
The obligations imposed by this Act require applicants such as Turrella Textiles Pty Ltd to submit a detailed application to the CEO, who must then assess whether the core criteria are met. The CEO is also mandated to publish a notice in the Gazette under subsection 269K(1) of the Act, inviting any interested party to submit objections if they believe the TCO should not be made. In this case, no submissions were received, facilitating the CEO's decision to proceed with the concession.
Failure to comply with the provisions of the Customs Act 1901, including making false statements in a TCO application, may result in criminal penalties. According to section 269W of the Act, a person can be fined up to 10,000 penalty units or imprisoned for up to five years, or both. These severe penalties underscore the importance of accurate and truthful submissions in the TCO application process. Additionally, the Act ensures that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on individuals or entities other than the Commonwealth.