EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620137
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 paper pulp liquor pressure disc filters on 22 December 2006.
Instrument
TCO No 0620137 was made on 16 March 2007. It declares that those certain paper pulp liquor pressure disc filters 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. 0620137 is taken to have come into force on 22 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 was enacted to provide a comprehensive legal framework for the regulation of customs and excise in Australia, ensuring effective border control and revenue collection. This Act, administered by the Parliament of Australia, aims to facilitate international trade while protecting domestic industries by regulating the import and export of goods. One of the mechanisms within the Act is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or elimination of customs duty on certain goods, provided specific criteria are met. The Explanatory Statement for Tariff Concession Instrument No. 0620137, made under the Customs Act 1901, addresses the need to provide tariff concessions for certain paper pulp liquor pressure disc filters, recognising the absence of substitutable goods produced in Australia. This instrument was introduced to benefit importers by reducing the duty on these specific goods from the general rate of 5% to free, thus enhancing the competitiveness of Australian industries in the global market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods that are eligible for a lower rate of customs duty under a TCO. The scope of the Act is limited to goods that are not specified in section 269SJ of the Act, which excludes certain types of goods from being subject to a TCO. The Act operates on a national level, with its provisions and the authority to make TCOs being a matter of Commonwealth legislation. The application of the Act is further defined by the Customs Tariff Act 1995, which specifies the rates of duty that apply to goods subject to a TCO. The Explanatory Statement for Tariff Concession Instrument No. 0620137 details the process for the application and issuance of a TCO, including the criteria that must be met and the requirement for public consultation. This instrument was specifically created for Australian Paper's application regarding certain paper pulp liquor pressure disc filters, where the Chief Executive Officer determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO. The TCO exempts these goods from the general rate of duty, instead applying a rate of duty that is free.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). Section 269F (1) allows any person to apply to the CEO for a TCO in respect of specific goods. If the CEO is satisfied that the application is valid, they must determine whether it meets the core criteria outlined in section 269C. A TCO application is considered to meet these criteria if, on the application day, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
Upon satisfying the core criteria, the CEO must issue a written order (TCO) specifying that the goods in question are subject to a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995 (the Tariff), as stated in subsection 269P(3). This order effectively lowers the customs duty on the specified goods. For instance, in the case of Australian Paper, a TCO was granted for certain paper pulp liquor pressure disc filters, reducing the duty rate from 5% to free. This concession came into force on the date the application was lodged, as per subsection 269S(1).
The Act imposes several obligations on the CEO regarding TCO applications. Firstly, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on why a TCO should not be granted, as per subsection 269K(1). This ensures transparency and provides an opportunity for public consultation. Additionally, the TCO does not affect the rights of any person as at the date of registration, ensuring that it does not disadvantage or impose liabilities on individuals or entities for actions taken before the TCO's effective date.
Failure to comply with the requirements of the Act or any related regulations could result in legal consequences. While the specific penalties for breaches are not detailed in the provided text, general penalties for breaches of the Customs Act can include fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any applicable provisions within the Act or related legislation.