EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611081
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.
Huhtamaki Australia Pty Ltd applied for a TCO in respect of certain kraft paperboard on 30 June 2006.
Instrument
TCO No 0610181 was made on 10 November 2006. It declares that those certain kraft paperboard 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. One submission objecting to the TCO application was received from Visy Industries Australia Pty Ltd.
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. 0611081 is taken to have come into force on 30 June 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. 0611081, enacted in 2006, is an instrument under the Customs Act 1901 that aims to provide tariff concessions on certain goods. This legislation was introduced to address the issue of applying for lower rates of customs duty for specific goods, thereby facilitating more cost-effective imports. The instrument allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) when certain criteria are met, particularly if no substitutable goods are produced in Australia. The instrument was made to support the policy objective of enabling businesses to access goods at reduced tariff rates, thus promoting economic efficiency and competitiveness. The CEO's decision to grant a TCO in this case was made following an application by Huhtamaki Australia Pty Ltd for certain kraft paperboard, leading to a reduction in the duty rate from 5% to 0%. This legislative measure ensures that the rights of importers are protected, and it does not impose any liabilities on any person as a result of the tariff concession.
Scope and Application
The Customs Act 1901, under its Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods. The Act allows any person to apply for a TCO if the goods in question are not those that are excluded under section 269SJ of the Act. The CEO is mandated to make a decision on the application if it meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Upon a successful application, the CEO issues a TCO that specifies the new duty rate applicable to the goods. For instance, Tariff Concession Instrument No. 0611081, effective from 30 June 2006, applies a 0% duty rate to certain kraft paperboard, reducing it from the general rate of 5%. This concession does not disadvantage any person or impose liabilities for actions taken prior to its registration, while providing potential duty refunds to importers of the affected goods.
Key Provisions
The Tariff Concession Instrument No. 0611081, under section 269P(3) of the Customs Act 1901, establishes the framework for the creation of Tariff Concession Orders (TCOs). These orders apply a lower rate of customs duty to specified goods. For instance, the instrument declares that certain kraft paperboard, the subject of an application by Huhtamaki Australia Pty Ltd, is eligible for a 0% duty rate instead of the general 5% rate, as stipulated in item 50 of Schedule 4 to the Customs Tariff Act 1995. For a TCO to be issued, the CEO must be satisfied that the application meets the core criteria, specifically that no substitutable goods are produced in Australia on the date the application is lodged, as per section 269C of the Act.
The Act imposes several obligations on the parties involved. The CEO must promptly publish a notice in the Gazette inviting submissions from interested parties once a TCO application is deemed valid, as required by subsection 269K(1). The CEO must also evaluate whether the application meets the core criteria, including ensuring that no substitutable goods are produced in Australia on the application date, as outlined in section 269C of the Act. If satisfied, the CEO must issue a written TCO, as mandated by subsection 269P(3).
Any breach of the requirements outlined in the Customs Act 1901 can result in significant consequences. Under the Act, there are potential civil and criminal penalties for non-compliance with TCO provisions. The specific penalties are not detailed in the provided text but typically include fines and, in severe cases, imprisonment. Importers who do not adhere to the stipulated conditions may face liability for the applicable duty rates, which could include retrospective charges for goods imported since the TCO's effective date. Furthermore, any misrepresentation or fraudulent claims in the TCO application process could lead to additional penalties under the Act.