EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607954
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.
Polymet Australia Pty Ltd applied for a TCO in respect of certain paper on 5 May 2006.
Instrument
TCO No 0607954 was made on 28 July 2006. It declares that those certain 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 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. 0607954 is taken to have come into force on 5 May 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, provides a framework for the administration of customs and excise duties. Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on certain goods, provided they meet specific criteria. Specifically, a TCO can be granted if the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, and if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The primary objective of this legislative framework is to encourage the import of goods that are not locally produced, thereby supporting economic efficiency and international trade. The Tariff Concession Instrument No. 0607954, made on 28 July 2006, exemplifies this process by granting a tariff concession on certain paper products, reducing the duty from 5% to 0%.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. These orders are applicable to goods that meet the core criteria outlined in the Act, specifically where no substitutable goods are produced in Australia in the ordinary course of business. An application for a TCO can be lodged by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The CEO's decision to grant a TCO is contingent upon satisfying that the application meets the core criteria, after which a written order is issued. The geographic reach of the Act is national, applying across the Commonwealth of Australia. Exclusions under the Act include goods specified in section 269SJ, and the application process involves a mandatory Gazette notice inviting objections, though none were received in the case of TCO No. 0607954. The TCO, once issued, does not affect pre-existing rights or impose new liabilities, but it does confer benefits such as duty refunds to importers for goods imported since the TCO's effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0607954 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO is satisfied that the application is valid and not for goods specified in section 269SJ of the Act, which are ineligible for TCOs, the CEO must determine if the application meets the core criteria (section 269C). The core criteria are met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and section 269E). If these criteria are satisfied, the CEO is required to issue a written order (section 269P(3)) specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (subsection 269K(1)). This notice must include an invitation for any person to lodge a submission if they believe there are reasons why the TCO should not be made. In this case, no submissions were received in response to the published notice. Secondly, a TCO is deemed to come into force on the day on which the application for the TCO was lodged (subsection 269S(1)). The rights of importers are beneficially affected under this TCO, and they may apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). However, the TCO does not impose any liabilities on any person, nor does it affect the rights of any person as at the date of registration in a way that disadvantages them.
In terms of offences and penalties, the legislation does not specify particular offences related to the application or issuance of a TCO. However, if an entity fails to comply with the requirements of the Customs Act 1901 or associated regulations, there could be broader legal consequences. For instance, fraudulent applications or misrepresentations in the application process could lead to penalties under the Customs Act, which may include fines or imprisonment. The maximum penalties for offences under the Customs Act can vary, but typically include fines up to $22,000 and imprisonment for up to two years for individuals, and fines up to $110,000 for bodies corporate. These penalties underscore the importance of adhering to the legal requirements and ensuring accurate and truthful information is provided in any TCO application.