Australia: Australian Customs narrow approach tariff concessions continues

Last Updated: 7 December 2014
Article by Russell Wiese, Lynne Grant and Fran Smyth

Finding it hard to work out whether a tariff concession order (TCO) applies? A recent case suggests that Australian Customs are in the same position. While the case involves fishing line, it has relevance for all importers that use TCOs.


In JM Gillies Agencies Pty Ltd v CEO of Customs the Administrative Appeals Tribunal (AAT) had to consider whether nylon fishing line wound onto plastic spools was covered by a TCO worded "Yarns, Nylon". In reaching its decision the AAT had to consider firstly the classification of the good and then secondly, whether the TCO applied.


The competing classifications were 9507 which included fishing tackle and 5404 which included monofilament (fishing line is a type of monofilament). Ultimately the Tribunal found that the fishing line was not covered by heading 9507. While the notes to heading 9507 indicated the heading covered monofilament made up into fishing line, the AAT considered this involved attaching items of tackle to the fishing line.

What is relevant to all importers is the extent to which the AAT relied on the explanatory notes to both chapters to determine the breadth of each heading. While it is usual to refer to explanatory notes, in this case what the notes said, and what they didn't say, seemed to greatly influence the Tribunal.

The case is a lesson to closely examine all chapter and heading notes. When examining notes do not simply focus on what is expressly stated but also consider what is implied by the wording used.


Having found that the goods were classified to heading 5404 the Tribunal had to consider whether the TCO wording, "yarns, nylon", applied. The only issue in this respect was whether fishing line was covered by the word "yarn". In finding that yarn did not cover fishing line on spools the Tribunal made a number of comments that users of TCOs should note:

  • The Tribunal member approved a statement that any doubt in the TCO wording should be resolved in favour of the importer
  • The 'stated use' description in the TCO application assists in understanding the meaning of the words used in the TCO
  • You must consider the characterisation or identification of the goods as imported when trying to establish the correct construction of the TCO
  • The word "yarn" must be given the same meaning in the TCO as in chapter 54 (the chapter in which the TCO fell)
  • The Tribunal member was not concerned with whether the TCO was attached to the correct heading (the heading did not refer to yarn at all).

It seems inconsistent that the AAT consider the uses of the goods provided by the TCO applicant to be relevant, but the nominated tariff heading as irrelevant.

If the TCO applicant, and Customs, considered the 5404 was the correct heading for the goods, and that heading did not cover "yarn", arguably the word "yarn" in the TCO must have been intended to have a wider meaning.

The fact that the nominated heading did not cover the ordinary meaning of the word "yarn" should have created some doubt as to the meaning of the word "yarn". Consistent with the Tribunal's earlier comments, that inconsistency should have been resolved in favour of the taxpayer/importer.

It also seems irreconcilable that the meaning of the word "yarn" should be influenced by the meaning of the word in chapter 54, but not the wording of the relevant heading.

While there are inconsistencies in the Tribunal's reasoning, it is clear that the stated use in the TCO application will influence the Tribunal. At a time where Customs is taking a strict approach on TCO use, it is prudent to know what the stated use in the application for the relevant TCO is. If that stated use indicates that the TCO was intended to cover goods different to your imports, there is a risk that the TCO does not in fact cover your goods.


The most interesting aspect of the case, and another element that impacts any importer that uses a TCO, is that right up until the day of trial Customs accepted that if the goods were classified to heading 5404, they were covered by the TCO. This must have been an issue that Customs closely examined during the making of the initial decision, the internal review and preparing for the AAT hearing.

That Customs reversed its position on the applicability of the TCO after such repeated and detailed consideration demonstrates the state of uncertainty that must exist within Customs.


Given the lack of certainty, importers cannot assume that simply because they have used a TCO for years without issue, that the use of the TCO is correct. This is the case even where they applied for the TCO for the specific goods being imported.

Certainty can be obtained by applying for a tariff advice. Each importer will make a decision based on their appetite for risk and clearness of the application of the TCO. The key is to actually assess the risk – how much duty has been saved over the past 4 years through the use of TCOs and what is the level of confidence that the TCOs apply? If either a large amount of duty has been saved, or the application of the TCO is not clear, we recommend obtaining the certainty offered by a tariff advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Russell Wiese
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.