EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508705
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.
Consolidated Veneers Pty Ltd applied for a TCO in respect of certain rolls of paper edge banding on 04 July 2005.
Instrument
TCO No 0508705 was made on 16 September 2005. It declares that those certain rolls of paper edge banding 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. 0508705 is taken to have come into force on 04 July 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. 0508705, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods where no substitutable goods are produced in Australia. The Customs Act 1901 established a framework allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide for a lower rate of customs duty on the goods specified in the order. This legislation was introduced to facilitate applications for tariff concessions, ensuring that the concession criteria are met before an order is made. The instrument was created following an application by Consolidated Veneers Pty Ltd for a TCO concerning certain rolls of paper edge banding, where the CEO determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria outlined in section 269C of the Act. The TCO provides a zero rate of duty on these goods, which otherwise attract a general rate of 5%, and it does not impose any liabilities on any person nor disadvantage anyone’s rights as of the registration date.
Scope and Application
The Customs Act 1901, as amended, provides a framework for Tariff Concession Orders (TCOs) under Part XVA, which the Chief Executive Officer of Customs can implement to lower the customs duty on specific goods. The process involves an application by a person to the CEO for a TCO concerning goods, provided they do not fall under the exclusions outlined in section 269SJ. The CEO evaluates the application against core criteria, particularly focusing on whether substitutable goods are produced in Australia, as defined in section 269D and section 269E. If these criteria are met, a TCO is issued, as exemplified by TCO No. 0508705 for certain rolls of paper edge banding, reducing their duty rate from 5% to free. This legislative mechanism applies nationwide within Australia, affecting entities involved in the importation of the specified goods. The application and commencement of TCOs are governed by the Act, with specific provisions ensuring the rights of non-Commonwealth entities are protected, and no retroactive liabilities are imposed. The scope of the TCO is further managed through subordinate instruments, which may extend or restrict its application as necessary.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0508705, made under the Customs Act 1901, include sections 269C, 269F, 269P, and 269SJ. These sections detail the process for applying for a Tariff Concession Order (TCO), the criteria for approval, and the effective date of the concession. Specifically, Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while Section 269C outlines the core criteria that the application must meet, which is primarily that no substitutable goods were produced in Australia on the date of the application. Section 269P(3) mandates that if the application meets these criteria, the CEO must issue a written order declaring the goods subject to a lower rate of customs duty as specified in the Customs Tariff Act 1995. Section 269SJ, on the other hand, lists goods that cannot be subject to a TCO.
The obligations imposed by this legislation primarily concern the CEO of Customs. The CEO must ensure that applications for TCOs are properly assessed against the core criteria outlined in Section 269C and that they do not pertain to goods specified in Section 269SJ. Furthermore, the CEO is required to publish a notice in the Gazette (Section 269K(1)) inviting submissions from interested parties if they believe the TCO should not be granted. The CEO must also consider any submissions received and respond appropriately. In this case, no submissions were received, allowing the CEO to proceed with issuing the TCO.
Breaches of the requirements set out in the Customs Act 1901 and its associated regulations may lead to various penalties and consequences. For instance, providing false information in an application for a TCO can result in civil or criminal penalties under the relevant sections of the Act. Additionally, failing to comply with the terms of a granted TCO may lead to the imposition of back duties and potential interest or fines. However, the specific offences, penalties, and consequences for breach are not detailed in the explanatory statement but would be found in the Customs Act 1901 and related legislation. The Act may provide for fines and imprisonment for serious breaches, with penalties varying depending on the nature and severity of the offence.