EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707646
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.
Paperlinx Australia Pty Ltd applied for a TCO in respect of certain office stationery on 23 May 2007.
Instrument
TCO No 0707646 was made on 3 August 2007. It declares that those certain office stationery 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. 0707646 is taken to have come into force on 23 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties. Part XVA of this Act outlines the process for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. This piece of legislation was introduced to address the need for flexibility in customs duty rates, ensuring that Australian businesses can compete effectively in the global market. Tariff Concession Instrument No. 0707646 was made under the authority of the Act, responding to an application from Paperlinx Australia Pty Ltd for reduced customs duty on certain office stationery. The policy objective is to support domestic industries by reducing the cost of imported goods, thereby encouraging trade and economic growth. The Tariff Concession Order was made after it was determined that no substitutable goods were produced in Australia, and the concession came into force on the date the application was lodged, 23 May 2007.
Scope and Application
The Customs Act 1901, as referenced in Tariff Concession Instrument No. 0707646, applies to any individual or entity seeking tariff concessions on imported goods. This Act allows for the application of a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO). The CEO of Customs is authorised to make such orders if an application is deemed to meet the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. The instrument extends to the Commonwealth jurisdiction and applies to all goods subject to the TCO, excluding those specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of TCOs can be further detailed and modified through subordinate instruments as necessary, but no exclusions or exemptions are explicitly stated beyond those in section 269SJ. The instrument, which came into force on the date the application was lodged, does not affect any existing rights or impose liabilities on individuals or entities other than the Commonwealth, thus ensuring that any rights of importers are beneficially affected.
Key Provisions
The primary operative sections of this legislation pertain to the application and approval of Tariff Concession Orders (TCOs) as detailed in Part XVA of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. The CEO, upon determining that the application is not for goods specified in section 269SJ, which lists ineligible goods, must assess whether the application meets the core criteria under section 269C. If the CEO ascertains that no substitutable goods were produced in Australia at the time the application was lodged, and if the goods are not specified in section 269SJ, the CEO is obligated to issue a written TCO order as per section 269P(3). This order effectively declares that the specified goods are subject to a prescribed rate of duty as outlined in Schedule 4 to the Customs Tariff Act 1995.
In accordance with the Act, the CEO must publish a notice in the Gazette inviting any interested party to submit objections or reasons why the TCO should not be granted, as stipulated in subsection 269K(1). For instance, in the case of TCO No. 0707646, the CEO published such a notice and received no submissions opposing the concession. A TCO is deemed to come into effect on the day the application is lodged, as indicated in subsection 269S(1). This means that the rights of parties, including importers, are affected from the date of the application, allowing importers to apply for duty refunds on goods imported since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.
The obligations imposed by the Act on the CEO include accepting valid TCO applications, publishing notices for stakeholder input, and making a written order if the core criteria are met. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities for actions taken before the order's effective date. The Act clearly delineates that the rights of non-Commonwealth entities are preserved, and no new liabilities are imposed on them.
Any breach of the provisions outlined in the Customs Act 1901 or the associated regulations could lead to civil or criminal consequences. While the explanatory statement does not explicitly detail the penalties, the Customs Act generally includes provisions for fines and imprisonment for offences related to customs duties. For example, under section 239 of the Act, a person who wilfully makes a false statement in connection with a duty or drawback can be fined up to 5,000 penalty units or imprisoned for up to five years, or both. Additionally, section 240 imposes penalties for evading duty, which can result in fines of up to 10,000 penalty units or imprisonment for up to ten years, or both. These penalties are subject to the prevailing laws and regulations, and the exact penalties may vary based on the specifics of the offence and jurisdiction.