EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504708
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 making dewatering vacuum boxes on 26 April 2005.
Instrument
TCO No 0504708 was made on 09 September 2005. It declares that those certain paper making dewatering vacuum boxes 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. 0504708 is taken to have come into force on 26 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. 0504708, enacted in 2005, is a regulation under the Customs Act 1901, addressing the need for tariff concessions for specific goods. This instrument was created to provide a lower rate of customs duty on certain goods that meet specific criteria, such as those not produced in Australia in the ordinary course of business. The Customs Act 1901, enacted by the Australian Parliament, provides the framework for such tariff concessions through Tariff Concession Orders (TCOs). The policy objective of this legislation is to support Australian industries by ensuring that certain goods can be imported at reduced duty rates, thus making them more competitive within the domestic market.
In the case of Tariff Concession Instrument No. 0504708, Australian Paper applied for a tariff concession on certain paper-making dewatering vacuum boxes, which were granted a free rate of duty as opposed to the general 5% duty rate. The instrument was published in the Gazette, inviting any interested parties to submit objections, though none were received. The concession took effect from the date of the application, 26 April 2005, and ensures that importers can apply for refunds on duties paid on these goods since that date. This instrument does not disadvantage or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0504708, under the Customs Act 1901, applies to any person or entity that imports goods specified in the Instrument, in this case, certain paper making dewatering vacuum boxes. The application of this Instrument is limited to the geographic jurisdiction of Australia, as it pertains to the Customs Act 1901 which is a Commonwealth Act. The Instrument aims to provide a concession in customs duty for the specified goods, reducing the duty from the general rate of 5% to free. This concession is applicable to the specified goods as long as they meet the criteria set out in the Act, specifically that no substitutable goods are produced in Australia. The Instrument is effective from the date the application was lodged, which is 26 April 2005, and does not affect any rights or liabilities accrued before this date. The Instrument may be extended or modified through subordinate instruments as per the provisions of the Customs Act 1901.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0504708 (section 269F) under the Customs Act 1901 (the Act) allow for the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) for specific goods, provided certain conditions are met. If an application for a TCO is made in respect of goods and the CEO determines that the goods are not specified in section 269SJ of the Act, the CEO must assess whether the application meets the core criteria set out in section 269C. The core criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these conditions are satisfied, the CEO must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on parties under this legislation include the requirement for Australian Paper to ensure that their application for a TCO met the core criteria and was not in respect of goods specified in section 269SJ of the Act. The CEO, on receiving the application, had to determine if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Upon satisfying these conditions, the CEO was required to make a TCO, as stated in section 269P(3) of the Act. Additionally, the CEO had to publish a notice in the Gazette inviting submissions from any person who considered there were reasons why the TCO should not be made (section 269K(1)). In this instance, no submissions were received.
Any breach of the requirements under the Customs Act 1901 can lead to civil or criminal consequences. For instance, if an entity fails to comply with the conditions for a TCO, it may result in the goods being subject to the general rate of customs duty rather than the concessional rate. The maximum penalties for breaches of the Customs Act are significant and can include fines and imprisonment. The exact penalties depend on the nature and seriousness of the offence, but they can be substantial, reflecting the importance of compliance with customs regulations. The Act provides a framework to ensure that entities such as Australian Paper can benefit from tariff concessions when the appropriate conditions are met, while also maintaining the integrity of the customs duty system.