EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606712
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.
Glanela Paper Agencies Pty Ltd applied for a TCO in respect of certain cooking and or baking paper on 10 April 2006.
Instrument
TCO No 0606712 was made on 7 July 2006. It declares that those certain cooking and or baking 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. 0606712 is taken to have come into force on 10 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 Customs Act 1901, enacted by the Parliament of Australia, includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislation was designed to address the need for concessional rates of customs duty on specific goods, enhancing trade efficiency and competitiveness. The Act allows the Chief Executive Officer of Customs to grant lower duty rates on goods that meet specific criteria, thereby incentivising imports of certain items not produced domestically. TCO No. 0606712, made on 7 July 2006, exemplifies this by granting a zero rate of duty on certain cooking and baking papers, effective from 10 April 2006, following an application by Glanela Paper Agencies Pty Ltd. The policy objective here is to facilitate the import of goods that are not produced in Australia, thereby benefiting consumers and importers while ensuring no adverse effects on existing rights or liabilities.
Scope and Application
The Tariff Concession Instrument No. 0606712 under the Customs Act 1901 applies to individuals and entities seeking a reduction in customs duty on specific goods through a Tariff Concession Order (TCO). This instrument particularly applies to Glanela Paper Agencies Pty Ltd, who sought a concession on certain cooking and baking paper. The instrument’s scope is limited to the goods specified in the application and those that meet the criteria set out in the Act, particularly the absence of substitutable goods produced in Australia. The geographic reach of the Act and the instrument is national, as it pertains to the importation of goods into Australia. There are no stated exclusions or exemptions within the scope of this specific instrument, although section 269SJ of the Act excludes certain goods from being subject to a TCO. The application of the Act may be further extended or restricted through subordinate instruments such as regulations, but the primary application focuses on the criteria outlined in the Act for granting tariff concessions.
Key Provisions
The main operative sections of this legislation under the Customs Act 1901 (section 269F) allow for the application of a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (the CEO). The CEO is required to assess whether the application meets the core criteria, particularly if no substitutable goods are produced in Australia (section 269C). If satisfied, the CEO must issue a written TCO (section 269P(3)). The instrument in question, TCO No. 0606712, specifies that certain cooking and baking paper are subject to a TCO, resulting in a duty rate of free, as opposed to the general rate of 5% (Schedule 4, item 50 of the Customs Tariff Act 1995). The TCO is effective from the date the application was lodged, 10 April 2006 (subsection 269S(1)).
The Act imposes several obligations on the parties involved. Firstly, any person seeking a TCO must ensure their application is lodged with the CEO and meets the specified criteria, such as the absence of substitutable goods in Australia. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before deciding whether to issue a TCO. Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on such persons in relation to actions taken prior to the TCO's effective date.
Failure to comply with the provisions of the Customs Act 1901 or the conditions of a TCO may result in various consequences. Under the Customs Act, breaches may lead to civil or criminal penalties, although specific penalties are not detailed in the explanatory statement. Generally, civil penalties could include fines or monetary compensation, while criminal penalties might include imprisonment, depending on the severity and intent of the breach. The precise penalties would be determined in accordance with the broader legislative framework governing customs and tariffs in Australia.
The Customs Act 1901 and related instruments aim to streamline the process of applying for tariff concessions, ensuring that the application process is transparent and fair. By specifying the conditions under which a TCO can be issued, the Act seeks to protect the interests of all stakeholders while facilitating trade. The obligations on the CEO and applicants are clearly defined, ensuring that the process is orderly and that any concessions granted are justified and do not inadvertently harm non-governmental parties.