EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602555
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.
Paperlink Ltd applied for a TCO in respect of certain self copy paper on 18 January 2006.
Instrument
TCO No 0602555 was made on 7 April 2006. It declares that those certain self copy 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. 0602555 is taken to have come into force on 18 January 2006.
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, enacted by the Commonwealth Parliament, establishes a framework for the application of customs duty on imported goods. Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide reduced customs duty rates for certain goods, provided specific criteria are met. This legislation addresses the gap in providing duty relief to encourage the import of goods that are not produced domestically or for which suitable substitutes are unavailable. The policy objective is to facilitate trade by reducing the cost of importing certain goods, thereby potentially stimulating economic activity and consumer access to a broader range of products. Tariff Concession Instrument No. 0602555, made under the Act, exemplifies this by granting a zero per cent duty rate on certain self-copy paper, effective from the date of application, 18 January 2006. This measure benefits importers by allowing them to claim refunds on duties paid on such goods imported since the effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any person or entity that seeks to import goods and avail themselves of lower customs duty rates through the application for a TCO. Such applications must be made under section 269F of the Act, and the CEO is tasked with determining whether the application meets the core criteria outlined in sections 269C, 269D, 269E, and 269SJ. A TCO is applicable to goods not specified in section 269SJ and where no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of the Act is national, applying across the Commonwealth of Australia. Any exclusions or exemptions from the application of a TCO are specified in section 269SJ, which lists goods that cannot be subject to a TCO. The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which prescribes the tariff items applicable to goods under a TCO. For instance, Tariff Concession Order No. 0602555, made on 7 April 2006, specifies that certain self-copy paper is subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate from 5% to 0% for these goods.
Key Provisions
The Tariff Concession Instrument No. 0602555, pursuant to the Customs Act 1901 (the Act), grants a tariff concession on certain self-copy paper, effective from 18 January 2006. According to section 269F of the Act, the Chief Executive Officer of Customs (the CEO) is required to make a written order, known as a Tariff Concession Order (TCO), if they are satisfied that the application meets the core criteria set out in section 269C of the Act. In this case, the CEO determined that no substitutable goods were produced in Australia at the time of the application, satisfying the core criteria. Consequently, the TCO declares that the self-copy paper in question is subject to a zero per cent duty rate, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved in the tariff concession process. Under section 269K(1), the CEO is required to publish a notice in the Gazette, inviting any interested parties to lodge a submission if they believe there are reasons why the TCO should not be made. However, in this case, the CEO did not receive any submissions in response to this invitation. Additionally, the CEO must ensure that the TCO does not affect the rights of any person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken prior to the registration date.
Breaches of the Act or its associated regulations may result in various penalties and consequences. While the explanatory statement does not explicitly state the penalties for non-compliance with the Act or the TCO, it is reasonable to infer that penalties could include fines or other financial penalties for breaches of customs duties or regulations. Additionally, failure to comply with the TCO or other provisions of the Act may result in the disqualification of the tariff concession, which could lead to the imposition of the standard duty rate on the affected goods. In more severe cases, criminal charges may be brought against individuals or entities found to have deliberately or negligently violated the provisions of the Act or the TCO.