EXPLANATORY STATEMENT
Tariff Concession Instrument No.0504278
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.
Australian Paper applied for a TCO in respect of certain paper pulp screeners or strainers on 13 April 2005.
Instrument
TCO No 0504278 was made on 17 June 2005. It declares that those certain paper pulp screeners or strainers 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. 0504278 is taken to have come into force on 13 April 2005.
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 Tariff Concession Instrument No. 0504278, enacted in 2005, is a legislative instrument made under the Customs Act 1901. It addresses the need to provide tariff concessions for specific goods, thereby offering economic benefits to Australian importers by reducing or eliminating customs duty on certain items. This instrument was introduced to streamline the process by which businesses can apply for tariff reductions, ensuring that such applications are considered by the Chief Executive Officer of Customs. The instrument was developed in response to a formal application from Australian Paper regarding certain paper pulp screeners or strainers, and it was made to take effect from the date the application was lodged, demonstrating a prompt legislative response to industry needs. The policy objective is to facilitate smoother trade operations by allowing tariff reductions where no suitable domestic alternatives exist.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0504278, applies to individuals or entities seeking tariff concessions for specific goods entering Australia. This legislation allows for the reduction or exemption of customs duties on certain goods under the condition that no substitutable goods are produced in Australia in the ordinary course of business. The instrument pertains to particular paper pulp screeners or strainers, which now benefit from a zero-duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995, following the application by Australian Paper. This instrument operates under the national jurisdiction, impacting all entities importing the specified goods into Australia. The concession does not affect the rights of any person, except the Commonwealth, in relation to anything done or omitted before the instrument's registration and does not impose any new liabilities. The scope of this legislation can be further extended or specified through subordinate instruments as determined by the Chief Executive Officer of Customs.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0504278 involve the making of a Tariff Concession Order (TCO) by the Chief Executive Officer (CEO) of Customs under the Customs Act 1901 (the Act). Section 269F allows a person to apply for a TCO concerning specific goods. The CEO must then determine if the application meets the core criteria outlined in section 269C. If the application is deemed valid, a TCO is issued under section 269P(3), effectively reducing the customs duty on the specified goods. In this instance, Australian Paper applied for a TCO for certain paper pulp screeners or strainers on 13 April 2005, which was granted on 17 June 2005, making these goods duty-free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application does not pertain to goods listed in section 269SJ of the Act, which are ineligible for a TCO. Furthermore, the CEO must verify that no substitutable goods are produced in Australia in the ordinary course of business, as per section 269C. In the case of Australian Paper's application, the CEO was required to confirm that no such substitutable goods were being produced. Additionally, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit objections to the TCO. In this case, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may lead to various consequences. While the explanatory statement does not specify the exact nature of the penalties, breaches of customs legislation generally result in substantial fines and potential imprisonment under the Act. For example, under section 235 of the Customs Act 1901, contravening the Act can result in penalties up to 10,000 penalty units, which equates to approximately AUD 1.1 million as of the latest adjustments. Additionally, the importation of goods without the appropriate duty payment can result in civil penalties, including the confiscation of goods and additional financial penalties. These stringent measures are in place to ensure compliance and the effective administration of customs duties and tariff concessions.