EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708128
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 exercise books on 30 May 2007.
Instrument
TCO No 0708128 was made on 10 August 2007. It declares that those certain exercise books 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. 0708128 is taken to have come into force on 30 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. 0708128, enacted in 2007, amends the Customs Act 1901 to address the issue of duty concessions for specific goods. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions for goods that meet certain criteria, particularly when no substitutable goods are produced in Australia. The purpose of this instrument is to facilitate trade by reducing customs duties for eligible imported goods, thereby supporting businesses and potentially lowering consumer prices. The instrument was developed and enacted by the Australian Parliament, aiming to provide a streamlined process for granting tariff concessions and ensuring that businesses have access to necessary materials without undue financial burden. The instrument ensures that the rights of importers are preserved and potentially enhanced, allowing them to seek refunds for duties paid on eligible goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0708128, facilitates tariff concessions on certain imported goods by establishing a process for the Chief Executive Officer of Customs to make Tariff Concession Orders. This Act applies to any person or entity that wishes to import goods that are not produced in Australia and that can benefit from a lower rate of customs duty. The geographic reach of this Act is national, affecting importers across Australia who import the specified goods. The process involves an application to the CEO, followed by a decision based on whether the goods are substitutable by Australian-produced goods and if they meet the core criteria outlined in the Act. The application process includes public notification to allow for objections, though in this case, no objections were received. The tariff concession does not affect the rights of persons other than the Commonwealth, and it does not impose any new liabilities on importers, potentially offering them benefits such as refunds of duty paid prior to the concession.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0708128 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer (CEO) of Customs to make a written order (a Tariff Concession Order or TCO) if satisfied that an application for a TCO meets the core criteria (section 269C). A TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C, 269D, 269E). If these conditions are met, the CEO must declare the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this case, the CEO issued TCO No. 0708128, declaring that certain exercise books are goods to which item 50 of Schedule 4 applies, reducing the duty rate from 5% to 0%.
The Act imposes several obligations and requirements on parties and entities it governs. Firstly, any person may apply to the CEO for a TCO in respect of goods if the goods are not specified in section 269SJ of the Act (section 269F). The CEO must then decide if the application meets the core criteria, which involves confirming that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written TCO. Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the notice.
Under the Customs Act 1901, there are no specific offences, penalties, or civil/criminal consequences outlined for breaches of the Tariff Concession Order process. However, general legal principles would apply if any breach of the Act or its regulations occurs. For example, any person who imports goods in a way that contravenes the Act or its regulations may be subject to penalties under the relevant sections of the Act, such as fines or imprisonment. In this case, the TCO does not impose any liabilities on any person, and the rights of importers will be beneficially affected. Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.