EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607550
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 segmented rolls on 27 April 2006.
Instrument
TCO No 0607550 was made on 14 July 2006. It declares that those certain segmented rolls 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. 0607550 is taken to have come into force on 27 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. 0607550 was enacted under the Customs Act 1901 to provide tariff concessions on certain goods. This legislation addresses the need to grant preferential customs duty rates for specific goods that are not produced in Australia and for which no suitable domestic alternatives exist. The instrument was introduced to facilitate trade by reducing the financial burden on importers of these goods, thereby making them more competitive in the market. The instrument was made by the Chief Executive Officer of Customs, who assessed the application by Australian Paper for tariff concessions on certain segmented rolls and determined that no substitutable goods were produced in Australia. As a result, the instrument declares that these goods are subject to a zero percent customs duty rate, down from the general rate of five percent.
The policy objective of this instrument is to support the efficient operation of trade by ensuring that Australian businesses have access to the goods they need without unnecessary financial barriers. By reducing the customs duty on these specific goods, the instrument aims to lower import costs, potentially leading to lower consumer prices and increased competitiveness for businesses that utilise these goods. The process of enacting the instrument involved public consultation, during which no objections were raised, and it came into effect on the date the application was lodged, 27 April 2006. This approach ensures that the benefits of tariff concessions are realised promptly, aiding in the smooth operation of trade activities.
Scope and Application
The Customs Act 1901 applies to the process of granting Tariff Concession Orders (TCOs) for goods that do not have substitutable domestic production. Specifically, the Act applies to individuals and entities that seek to import goods eligible for tariff concessions, and it is administered by the Chief Executive Officer of Customs. This Act operates within the Commonwealth jurisdiction and affects the customs duties on specific imported goods. A TCO is applicable when the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business, and the application meets the core criteria outlined in the Act. The explanatory statement illustrates this process with the example of Australian Paper's application for a TCO concerning certain segmented rolls, which was granted on 14 July 2006, resulting in a reduced customs duty rate from 5% to 0%. The Act does not specify exclusions or exemptions beyond the criteria that substitutable goods should not be produced domestically. The scope of the Act can be extended or restricted through subordinate instruments, as implied by the process described.
Key Provisions
The main operative sections of the Customs Act 1901, specifically relating to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided those goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these core criteria, they must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that the goods they seek a TCO for are not prohibited under section 269SJ and that the application meets the core criteria, particularly by verifying that no substitutable goods are produced in Australia in the ordinary course of business. The CEO, on the other hand, must accept valid applications, assess whether they meet the core criteria, and make a written order if satisfied. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who might have reasons why the TCO should not be made, as per section 269K(1). The TCOs are effective from the day the application is lodged, and they do not affect the rights of any person adversely as at the date of registration or impose liabilities for actions taken before the registration date.
The legislation also outlines potential consequences for breaches, although the specific offences, penalties, or civil/criminal consequences are not detailed within the provided text. Generally, under Australian law, breaches of customs regulations can lead to a variety of penalties, including fines and imprisonment, depending on the severity of the breach. However, the provided text does not specify maximum penalties or detailed consequences for non-compliance with the TCO provisions. The focus instead is on the administrative process of applying for and granting TCOs, ensuring that the process is transparent and includes opportunities for public input.