EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707620
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 Pty Ltd applied for a TCO in respect of certain bleached paper on 22 May 2007.
Instrument
TCO No 0707620 was made on 10 August 2007. It declares that those certain bleached 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. 0707620 is taken to have come into force on 22 May 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. 0707620 was enacted in 2007 under the Customs Act 1901, addressing the need for a streamlined process to grant tariff concessions on specific goods. The Customs Act 1901, as amended, provides a framework for the Chief Executive Officer of Customs to consider and implement Tariff Concession Orders (TCOs) for goods that are not produced domestically, thereby ensuring fair trade practices and potentially reducing costs for importers. This legislation was designed to support economic efficiency by allowing lower customs duties on imported goods where no suitable domestic alternatives exist. The policy objective of this Instrument, as reflected in the explanatory statement, is to facilitate the importation of certain bleached paper by applying a zero per cent duty rate instead of the general 5 per cent, thus benefiting importers by reducing their duty liabilities. The instrument was introduced following an application by Visy Industries Pty Ltd, and after considering the feedback from the public, no submissions were received opposing the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) that reduce the rate of customs duty on certain goods. This provision applies to any person or entity that meets the criteria set out in the Act, allowing them to apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The primary condition for a TCO is that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged, as per section 269C of the Act. The TCO scheme operates nationally across Australia, with the CEO having the authority to make these orders under the Act. The application of this Act is not restricted by geographic boundaries but is subject to the specific conditions outlined in the Act and any relevant subordinate instruments. There are no explicit exclusions or thresholds stated within the explanatory statement for who can apply for a TCO, though the ineligibility of certain goods as per section 269SJ provides a boundary. The Act allows for the extension or restriction of its application through subordinate instruments, ensuring the scheme can adapt to changes in trade and production practices.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Instrument No. 0707620, outline the process and criteria for granting Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods, provided these goods are not those specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, the CEO must make a written order (section 269P(3)) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thus applying a lower rate of customs duty.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties regarding the application as soon as practicable after accepting it as valid (subsection 269K(1)). Moreover, any person applying for a TCO must provide sufficient information to demonstrate that the goods are eligible for concession.
Any breach of the provisions under this Act could result in civil or criminal consequences. While the explanatory statement does not explicitly detail penalties for non-compliance, under Australian law, failure to adhere to customs regulations can lead to fines, imprisonment, or both. For instance, knowingly making a false statement in an application could be considered an offence under the Crimes Act 1914. Additionally, if an entity benefits from a TCO unlawfully, they could be subject to financial penalties and required to repay any unjustifiably received tariff concessions.
The commencement of the TCO is significant, as it is taken to have come into force on the day the application was lodged (subsection 269S(1)). This means that the rights of importers are beneficially affected from that date, and they can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the TCO's registration date.