EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605184
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.
ABC Paper and Paper Mills applied for a TCO in respect of certain dry paper pulp conveyors on 14 March 2006.
Instrument
TCO No 0605184 was made on 26 May 2006. It declares that those certain dry paper pulp conveyors 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. 0605184 is taken to have come into force on 14 March 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 Australian Parliament, establishes a framework for the regulation of customs and excise through the imposition of tariffs. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for reduced rates of customs duty on certain goods. This legislative mechanism was introduced to address the need for flexibility in tariff application to support industries and consumers by potentially lowering the cost of imported goods. Instrument No. 0605184, made under this Act, was introduced to provide a tariff concession for certain dry paper pulp conveyors, effectively setting the duty rate to free, where the general rate would otherwise be 5%. This was enacted to ensure that no substitutable goods were produced in Australia, thereby meeting the core criteria specified in the Act. The process involved public consultation, which in this instance did not yield any submissions opposing the concession. The Tariff Concession Order came into effect on the date the application was lodged, thereby benefiting importers who can apply for duty refunds on goods imported since that date.
Scope and Application
The Tariff Concession Instrument No. 0605184 under the Customs Act 1901 applies to the Chief Executive Officer of Customs (CEO) in their role of assessing and approving applications for Tariff Concession Orders (TCO). These orders are sought by persons or entities, such as ABC Paper and Paper Mills, who are importing goods that are not currently being produced in Australia. The instrument specifically applies to the category of goods known as dry paper pulp conveyors, which are designated under item 50 of Schedule 4 to the Customs Tariff Act 1995. The scope of the legislation is national, as it pertains to customs duties throughout Australia. The instrument does not impose any disadvantage to existing rights or liabilities on any person other than the Commonwealth and is effective from the date the application was lodged, in this case, 14 March 2006. The CEO's decision to grant the TCO is subject to certain criteria, including the absence of substitutable goods being produced in Australia, and the instrument can be extended or modified through further orders under the Customs Act 1901.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0605184, provide for the reduction or elimination of customs duty on certain goods, in this case, certain dry paper pulp conveyors (section 269P(3)). The order is made by the Chief Executive Officer of Customs (CEO) when they are satisfied that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). This means that the CEO must determine that the goods in question are not being produced locally and that there are no alternatives that could be used in their place. If these conditions are met, the CEO can then make a written order declaring the goods to which a prescribed tariff item applies, effectively reducing the customs duty on those goods to zero or to a specified lower rate (section 269P(3)). The TCO is taken to have come into force on the date the application was lodged, in this case, 14 March 2006 (subsection 269S(1)).
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person who wishes to apply for a Tariff Concession Order must do so by submitting an application to the CEO (section 269F). The CEO must then decide whether the application meets the core criteria, which include the condition that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the application meets these criteria, the CEO is required to make a written order (section 269P(3)). The CEO is also obligated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must make this decision as soon as practicable after accepting the application as valid. In this case, no submissions were received.
The legislation also outlines the consequences of breaching its provisions, though specific offences and penalties are not detailed in the explanatory statement provided. Generally, breaches of the Customs Act 1901 may result in both civil and criminal penalties. Civil penalties can include fines and the recovery of unpaid duties, while criminal penalties can include imprisonment, particularly if the breach is wilful or involves fraud. However, the maximum penalties are not specified in this explanatory statement. The Act ensures that the rights of individuals and entities are not adversely affected by the TCO, except where it benefits them, such as in the case of importers who can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).