EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515968
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.
Kimberly-Clark Australia applied for a TCO in respect of certain rolls or sheets of airlaid absorbent paper on 09 November 2005.
Instrument
TCO No 0515968 was made on 06 February 2006. It declares that those certain rolls or sheets of airlaid absorbent 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 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. 0515968 is taken to have come into force on 09 November 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. 0515968, enacted in 2006 under the Customs Act 1901, addresses the need for tariff concessions on specific goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). This instrument was introduced to facilitate the application process for businesses seeking to reduce customs duty on goods not produced domestically, thereby promoting trade and economic efficiency. The policy objective is to provide relief to importers who can demonstrate that no substitutable goods are produced in Australia, thus ensuring that the application of tariff concessions is limited to cases where it would not adversely affect domestic production. The instrument was developed following an application by Kimberly-Clark Australia for a tariff concession on certain rolls or sheets of airlaid absorbent paper, and it came into force on the date the application was lodged, 9 November 2005.
Scope and Application
The Tariff Concession Instrument No. 0515968 applies to any person who has lodged an application for a Tariff Concession Order (TCO) under the Customs Act 1901. Specifically, this instrument pertains to Kimberly-Clark Australia's application for a TCO in respect of certain rolls or sheets of airlaid absorbent paper. The Act applies to the Chief Executive Officer of Customs (CEO) who must evaluate the application against the core criteria stipulated in the Act. The geographic reach of this Act is national, as it is a Commonwealth instrument. The Act does not specify exclusions, but it does exclude goods listed in section 269SJ of the Act from being subject to a TCO. The instrument extends the application of the Act by specifying the particular goods that are subject to a lower rate of customs duty, in this case, reducing the duty on certain airlaid absorbent paper from 5% to free. The Act also provides for subordinate instruments to further define terms such as "goods produced in Australia" and "ordinary course of business," which are crucial for determining the eligibility of a TCO application.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically within Part XVA, pertain to the making and effects of Tariff Concession Orders (TCOs). Under section 269F, any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods, provided the goods are not those specified in section 269SJ which are ineligible for a TCO. The CEO is required to determine if the application meets the core criteria as outlined in section 269C. This determination hinges on whether, at the time of the application, no substitutable goods were being produced in Australia in the ordinary course of business, a definition provided in section 269D for 'goods produced in Australia', section 269E for 'ordinary course of business', and section 269D again, indirectly, for 'substitutable goods'. If the core criteria are met, the CEO must issue a written TCO under section 269P(3), specifying the goods and the applicable item from Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties it governs. Firstly, the CEO must ensure that any TCO application is assessed against the core criteria specified in section 269C. This includes verifying that no substitutable goods are being produced in Australia at the time of the application. Additionally, upon receiving a valid application, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the making of the TCO, as per section 269K(1). The CEO is also required to consider any submissions received and make a final decision based on the application's merits and the evidence provided.
In terms of legal consequences, the Act does not explicitly outline specific offences or penalties for breaches related to the making of TCOs. However, it is understood that any failure to comply with the statutory requirements for issuing a TCO could lead to legal challenges or administrative reviews. Additionally, if a TCO is issued in error or without proper justification, it could potentially result in financial liabilities for the Commonwealth if the TCO is later found to be invalid. This underscores the importance of rigorous compliance with the statutory criteria and procedural requirements.
Overall, the Act establishes a structured process for the issuance of Tariff Concession Orders, ensuring that the benefits of tariff concessions are granted only under specific and verifiable conditions. This legislative framework aims to balance the interests of importers and the broader economic policy objectives of the Australian government.