EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606198
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.
Australian Paper applied for a TCO in respect of certain paper and/or paperboard drying cylinders on 3 April 2006.
Instrument
TCO No 0606198 was made on 25 June 2006. It declares that those certain paper and/or paperboard drying cylinders 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. 0606198 is taken to have come into force on 3 April 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 Tariff Concession Instrument No. 0606198, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods not produced domestically, in this case certain paper and/or paperboard drying cylinders. This instrument was introduced to ensure that Australian industries are not disadvantaged by higher customs duties on goods for which no local substitutes exist. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to grant such concessions, and the instrument was made following an application by Australian Paper. The policy objective is to facilitate fair trade practices by reducing the tariff burden on imported goods for which no domestic production exists, thus supporting the competitiveness of Australian businesses. The instrument came into force on 3 April 2006, the date the application was lodged, and it benefits importers by allowing them to claim refunds for duties paid on these goods from that date.
Scope and Application
The Customs Act 1901, through the instrument Tariff Concession Order No. 0606198, provides for tariff concessions on certain paper and/or paperboard drying cylinders, lowering the customs duty rate from 5% to 0%. This concession applies to the goods specified in the order, provided that no substitutable goods are produced in Australia. The application for such a concession is made by a person to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria set out in the Act. The instrument extends to the Commonwealth and is applicable to entities and individuals importing the specified goods. There are no exclusions mentioned for this specific order, and it does not affect the rights of any person other than the Commonwealth or impose any liabilities on them. The TCO is effective from the date the application was lodged, which in this case was 3 April 2006. Any person, including importers, may benefit from this order by applying for a refund of duty on goods imported since the effective date of the TCO. The application process includes an opportunity for public comment, although no submissions were received in this instance.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0606198 under the Customs Act 1901, revolve around the process and criteria for establishing Tariff Concession Orders (TCOs) (sections 269F, 269C, 269B, 269D, 269E, and 269P). Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO concerning goods. The core criteria for approval, as outlined in section 269C, require that on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Definitions and specific terms, such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," are clarified in sections 269B, 269D, and 269E. If the CEO is satisfied that the application meets these criteria, they must issue a written order, as per section 269P(3).
The obligations and requirements imposed by the Act on parties and entities primarily involve the CEO's duty to evaluate TCO applications against the stipulated criteria and to publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). This notice serves as an opportunity for any person to object to the making of the TCO if they believe there are valid reasons against it. The CEO must consider any submissions received and decide whether to proceed with the TCO. In this specific case, Australian Paper applied for a TCO concerning certain paper and/or paperboard drying cylinders, and no submissions were received in response to the published notice.
Regarding offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly outline specific penalties for non-compliance with the TCO provisions in this explanatory statement. However, breaches of customs regulations generally can lead to civil or criminal penalties, depending on the severity and intent of the breach. Under the broader framework of the Customs Act, penalties can include fines, imprisonment, or both, with the exact penalties depending on the specific breach and the provisions of other related legislation. It is important for entities and individuals to adhere to the terms of the TCO and the overall customs regulations to avoid any adverse legal consequences.