EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701499
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.
ABC Paper & Paper Mills Pty Ltd applied for a TCO in respect of certain paper making filterers on 29 January 2007.
Instrument
TCO No 0701499 was made on 30 April 2007. It declares that those certain paper making filterers 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. 0701499 is taken to have come into force on 29 January 2007.
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. 0701499 was enacted in 2007 under the Customs Act 1901 to provide tariff concessions for certain goods. This instrument was introduced to address the need for a streamlined process to grant tariff concessions, ensuring that Australian businesses can access certain goods at reduced customs duty rates if no suitable substitute is produced locally. The Customs Act 1901, as amended, empowers the Chief Executive Officer of Customs to make such tariff concession orders if specific criteria are met. The objective of this legislative measure is to support Australian industries by making imported goods more affordable, thereby promoting competition and economic efficiency. The Tariff Concession Instrument No. 0701499 specifically applies to paper making filterers, reducing their customs duty rate from 5% to 0%, and was made effective from 29 January 2007, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0701499 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) is sought and granted by the Chief Executive Officer of Customs (CEO). The legislation provides a framework for applying for and granting TCOs, which result in a reduction or exemption of customs duties on certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This applies to entities and individuals seeking reduced customs duties for the goods they intend to import, as long as the goods are not specified in section 269SJ of the Act as ineligible for a TCO. The geographic reach of this Act is national, as it applies to imports into Australia. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to goods under the TCO. There are no exclusions or exemptions mentioned in the explanatory statement, but the Act does provide for certain goods to be ineligible for a TCO, as outlined in section 269SJ.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that allow for a lower rate of customs duty on certain goods. When an individual or entity applies for a TCO under section 269F, the Chief Executive Officer of Customs (CEO) must consider the application. If the CEO determines that the application is not for goods specified in section 269SJ, they must assess whether it meets the core criteria outlined in section 269C. The application meets these criteria if, on the date it was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for these terms can be found in sections 269D, 269E, and 269F of the Act. If the CEO is satisfied that the application meets the core criteria, they must issue a written order under subsection 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
In this context, ABC Paper & Paper Mills Pty Ltd applied for a TCO concerning certain paper making filterers on 29 January 2007. The CEO, upon determining that no substitutable goods were produced in Australia, issued TCO No. 0701499 on 30 April 2007. This TCO declares that the specified paper making filterers are subject to item 50 of Schedule 4 to the Tariff, reducing the duty rate from 5% to 0%. The TCO is considered effective from the date the application was lodged, 29 January 2007, as per subsection 269S(1) of the Act. Additionally, the CEO must publish a notice in the Gazette inviting submissions against the TCO under subsection 269K(1), although no submissions were received in this instance.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application not pertaining to goods specified in section 269SJ is assessed against the core criteria. They must also publish a notice in the Gazette inviting any objections to the TCO. For the applicant, such as ABC Paper & Paper Mills Pty Ltd, the obligation lies in providing accurate information to meet the criteria for a TCO. Once a TCO is issued, importers of the affected goods can apply for a duty refund under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not disadvantage any person by imposing liabilities for actions taken before its registration.
Any breach of the provisions under the Customs Act 1901 or the associated regulations can lead to various consequences. While the explanatory statement does not detail specific offences or penalties for breaches related to TCOs, it is known that the Act and its regulations provide for both civil and criminal penalties. These can include fines, imprisonment, or both, depending on the severity of the breach. For instance, knowingly making a false statement in an application could result in significant penalties under the Act. Therefore, compliance with the obligations and requirements set out in the Act is crucial to avoid these potential consequences.