EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512195
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.
Labelmakers Group Pty Ltd applied for a TCO in respect of certain Wet Strength Label Base Paper on 16 September 2005.
Instrument
TCO No 0512195 was made on 5 December 2005. It declares that those certain Wet Strength Label Base Paper 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 0%.
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. 0512195 is taken to have come into force on 16 September 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 Customs Act 1901 was enacted to regulate the import and export of goods within Australia, ensuring compliance with customs laws and facilitating trade. A significant feature of this Act is the scheme for Tariff Concession Orders (TCOs), which allows the Chief Executive Officer of Customs to grant lower rates of customs duty on specified goods. This mechanism was introduced to address the issue of ensuring fair trade practices by preventing the imposition of customs duties on goods for which no domestic equivalent is produced, thereby encouraging competition and protecting consumers from excessive taxation. The Tariff Concession Instrument No. 0512195, enacted on 5 December 2005, exemplifies this by providing a zero per cent duty rate for certain Wet Strength Label Base Paper, granted to Labelmakers Group Pty Ltd. This was done after confirming that no substitutable goods were produced in Australia, thereby fulfilling the core criteria set out in the Customs Act 1901. The policy objective underpinning this initiative is to promote economic efficiency by reducing the cost of imported goods and supporting industries that cannot compete with locally produced alternatives.
Scope and Application
The Tariff Concession Instrument No. 0512195 under the Customs Act 1901 applies to Labelmakers Group Pty Ltd in their application for tariff concession orders (TCOs) concerning certain Wet Strength Label Base Paper. The Act allows the Chief Executive Officer of Customs to grant TCOs, which result in a lower rate of customs duty for specified goods, provided that the application meets the core criteria and no substitutable goods are produced in Australia. This specific TCO was made effective from 16 September 2005, the date the application was lodged, and provides a zero percent duty rate on the specified paper, reducing it from the general rate of 5%. The instrument's application is confined to the goods specified in the application and does not disadvantage any person or impose liabilities on anyone for actions prior to the instrument's registration. The TCO is applicable nationally and can be extended or modified through subordinate instruments as necessary.
Key Provisions
The key operative sections of the Customs Act 1901, as applied to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application does not relate to goods specified in section 269SJ and that it meets the core criteria set out in section 269C, the CEO must make a written order (the TCO) declaring that the goods in question are subject to a prescribed rate of duty as specified in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations and requirements on the parties involved in the TCO process. For instance, the CEO must ensure that the application is not in respect of goods that are specified in section 269SJ and must verify that the application meets the core criteria set out in section 269C. This includes confirming that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is also required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. Once a TCO is made, it comes into force on the day the application was lodged. Importantly, the TCO does not affect the rights of any person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the registration date.
Under the Customs Act 1901, breaches of the requirements or obligations associated with TCOs could lead to various civil or criminal consequences. The specific offences, penalties, or consequences for non-compliance are not detailed in the provided text. However, it is worth noting that failing to meet the criteria for a TCO, or making false statements in an application, could potentially lead to penalties under the Customs Act. For example, section 225 of the Customs Act sets out that a person who knowingly makes a false statement or representation to obtain a benefit under the Act may be liable to a penalty of up to $22,200 for a corporation and $4,440 for an individual, or imprisonment for up to two years, or both. Similarly, failure to comply with the Act's provisions regarding the publication of notices and invitations for submissions could also result in penalties, although these are not explicitly stated in the provided text.