EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606018
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 steamers and misters on 29 March 2006.
Instrument
TCO No 0606018 was made on 16 June 2006. It declares that those certain steamers and misters 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. 0606018 is taken to have come into force on 29 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 was enacted to provide a framework for the regulation of customs and excise duties, among other things. One of the provisions within this Act, specifically Part XVA, addresses the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty to apply to certain goods. This was introduced to address the need for flexibility in the application of customs duties to support trade and industry, particularly in cases where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0606018 was made under this provision, declaring that certain steamers and misters are subject to a zero rate of duty, effective from 29 March 2006. This was done after ABC Paper and Paper Mills applied for the concession, and no objections were raised during the consultation period. The policy objective is to facilitate trade by reducing the duty on specific goods, thus benefiting importers by potentially allowing them to apply for duty refunds on imports made since the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0606018 is an instrument made under the Customs Act 1901, which pertains to the application and creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). It applies to entities or individuals seeking tariff concessions for specific goods, ensuring that the application aligns with the core criteria set out in the Act, particularly if the goods are not substitutable by Australian-made alternatives. This instrument was made in response to an application by ABC Paper and Paper Mills for a TCO regarding certain steamers and misters, resulting in the specified goods being subject to a lower rate of customs duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate set at free instead of the general 5%. The CEO's decision to grant the TCO was made after considering that no substitutable goods were produced in Australia on the date of the application. The TCO came into force on 29 March 2006, the date of the application, and it does not adversely affect any pre-existing rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The primary sections of this legislation, specifically sections 269C and 269F of the Customs Act 1901, outline the process for applying for and granting a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the application is not in relation to goods listed in section 269SJ, which are ineligible for TCOs, the CEO must evaluate whether the application meets the core criteria set out in section 269C. This section stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. A TCO application that satisfies these criteria results in the CEO issuing a written order, as per section 269P(3), declaring that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995. This order effectively lowers the customs duty rate for those goods.
The Customs Act 1901 imposes certain obligations on the parties involved. The CEO is obligated to assess whether a TCO application complies with the criteria in section 269C. If satisfied, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections to the TCO within a specified period. Once the CEO makes a TCO, the affected goods are subject to the reduced customs duty rate specified in the order, benefiting importers who can apply for duty refunds on goods imported since the effective date of the TCO. The legislation ensures that the rights of non-Commonwealth entities are not adversely affected by the TCO, as it does not impose liabilities or disadvantage anyone regarding actions taken before the TCO's effective date.
In the context of this legislation, breaches of the conditions or misuse of the TCO system could lead to various consequences. While the explanatory statement does not detail specific offences or penalties, the Customs Act 1901 generally provides for penalties for non-compliance with customs regulations. Offences may include knowingly making false statements in an application or misusing the benefits of a TCO. Penalties can range from fines to imprisonment, depending on the severity of the offence. The exact penalties would be determined based on the specific provisions of the Customs Act 1901 and any related regulations or subsidiary legislation.
The Tariff Concession Order No. 0606018, as declared in the explanatory statement, provides specific tariff concessions for certain steamers and misters. These goods now attract a duty rate of free under item 50 of Schedule 4 of the Customs Tariff Act 1995, instead of the general rate of 5%. This order was made on 16 June 2006, following an application by ABC Paper and Paper Mills on 29 March 2006. The CEO's decision was based on the absence of substitutable goods produced in Australia, fulfilling the criteria set out in section 269C. The order came into force on the date the application was lodged, and importers can apply for duty refunds on goods imported since that date.