EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619611
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.
Visy Industries Australia Pty Ltd applied for a TCO in respect of certain cardboard tubular sleeves on 11 December 2006.
Instrument
TCO No 0619611 was made on 09 March 2007. It declares that those certain cardboard tubular sleeves 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. 0619611 is taken to have come into force on 11 December 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 regulation of customs and excise, including the imposition of customs duty on imported goods. One aspect of this regulation is the provision for Tariff Concession Orders (TCOs) under Part XVA of the Act, which allow for the reduction or exemption of customs duty on certain imported goods if specified criteria are met. This mechanism addresses the problem of ensuring that Australian industries remain competitive by allowing for tariff concessions where Australian production of substitutable goods is not sufficient. The Tariff Concession Instrument No. 0619611, made on 9 March 2007, exemplifies this process by granting a tariff concession on certain cardboard tubular sleeves, reducing the duty rate from the general 5% to free, effective from 11 December 2006. The policy objective of this instrument is to support Australian industries by reducing the cost of imported goods where Australian production is not viable, thereby encouraging economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0619611, made under the Customs Act 1901, applies to specific goods identified in the instrument, namely certain cardboard tubular sleeves, and is intended to provide a concession on customs duty for these items. This legislation is relevant to entities involved in the importation of these goods, specifically targeting importers who would benefit from a reduced or eliminated customs duty on these products. The instrument was created to provide a tariff concession where it was determined that no substitutable goods were produced in Australia at the time the application was made, fulfilling the criteria outlined in section 269C of the Customs Act 1901. The application of this instrument is confined to the Commonwealth jurisdiction, applying across Australia in accordance with the provisions of the Customs Act. The instrument does not impose any liabilities or disadvantage existing rights of persons other than the Commonwealth and does not affect any transactions occurring prior to the instrument's effective date. The scope of this Act can be extended or further defined through subordinate instruments as necessary, though no such extensions or restrictions are indicated in this specific instance.
Key Provisions
The Tariff Concession Instrument No. 0619611, made under section 269F of the Customs Act 1901, allows for a lower rate of customs duty to apply to certain goods specified in the instrument, in this case, certain cardboard tubular sleeves. This instrument was made following an application by Visy Industries Australia Pty Ltd and was issued on 9 March 2007. The instrument declares that the goods in question are to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the general rate of duty on these goods being 5% and the rate for the goods subject to the Tariff Concession Order (TCO) being free.
The obligations imposed by the Customs Act 1901 under section 269C include ensuring that the application for a TCO meets the core criteria, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. For the purposes of the Act, 'substitutable goods' are defined as goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put. The Chief Executive Officer of Customs (the CEO) is required to make a written order if satisfied that the application meets these criteria. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO.
Failing to comply with the requirements of the Customs Act 1901, including the submission of a valid application for a TCO or meeting the core criteria, may lead to civil consequences for the party in breach. While specific penalties are not mentioned in the explanatory statement, breaches of customs laws generally carry significant penalties. For instance, under section 269K of the Act, the CEO has the authority to take action against any party that fails to comply with the Act’s requirements. Civil penalties for breaches of customs regulations can include fines and other monetary penalties as prescribed by the Act. Furthermore, persistent or serious breaches may lead to criminal charges, resulting in additional criminal penalties such as imprisonment.