EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918850
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.
Standard Knitting Mills Pty Ltd applied for a TCO in respect of certain yarn waxed for knitting on 03 June 2009.
Instrument
TCO No 0918850 was made on 28 August 2009. It declares that those certain yarn waxed for knitting 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. 0918850 is taken to have come into force on 03 June 2009.
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 Australian Parliament, facilitates the implementation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, addressing the need to provide tariff concessions on specific imported goods under certain conditions. This legislative framework aims to ensure that TCOs are granted only when no substitutable goods are produced in Australia, thereby preventing any competitive disadvantage to local industries. The 2009 Tariff Concession Order No. 0918850 was made in response to an application by Standard Knitting Mills Pty Ltd for tariff concessions on certain yarn waxed for knitting. This order, which became effective on the date of application, provides a zero rate of customs duty on these goods, as no substitutable goods were produced in Australia at the time of the application. The order's implementation was preceded by a public notice inviting objections, none of which were received, ensuring the process was transparent and inclusive.
Scope and Application
The Tariff Concession Instrument No. 0918850 under the Customs Act 1901 applies to goods that are subject to a Tariff Concession Order (TCO) granted by the Chief Executive Officer of Customs (CEO). The instrument specifically pertains to certain yarn waxed for knitting, which, under the TCO, are now subject to a zero rate of customs duty instead of the general rate of 5%. The application of this TCO is confined to the geographic jurisdiction of Australia, and it extends to any entity or individual importing the specified goods into Australia. The TCO does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The application process for a TCO, as outlined in section 269F of the Act, requires an applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied with the application and that it meets the core criteria set out in section 269C, they must make a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. The TCO does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person's rights as at the date of registration concerning actions taken prior to the TCO's effective date.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0918850 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, and 269P, which collectively address the criteria for making a Tariff Concession Order (TCO). Section 269C states 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. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269D further defines 'goods produced in Australia', section 269E clarifies 'ordinary course of business', and section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied the application meets the core criteria, they must issue a written TCO order.
The Act imposes specific obligations on applicants for a TCO. Firstly, the applicant must ensure that their application is not for goods specified in section 269SJ of the Act, which lists goods ineligible for a TCO. Secondly, the applicant must provide sufficient evidence to demonstrate that no substitutable goods are produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). The CEO must then consider any submissions received before making a decision.
For breaches of the Customs Act 1901, the Act provides for both civil and criminal penalties. Section 276 specifies that any person who contravenes a provision of the Act is liable to a penalty, with the maximum penalty varying according to the severity of the offence. Civil penalties can include fines up to a specified amount, while criminal penalties can lead to imprisonment, depending on the nature and extent of the breach. Additionally, under subsection 269S(1), a TCO is considered effective from the date the application was lodged, ensuring that no person is disadvantaged by the TCO regarding actions taken before its effective date.