EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712437
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.
Sca Hygiene Australasia Pty Limited applied for a TCO in respect of certain tissue paper edge embossers on 02 August 2007.
Instrument
TCO No 0712437 was made on 12 October 2007. It declares that those certain tissue paper edge embossers 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. 0712437 is taken to have come into force on 02 August 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 Commonwealth Parliament, addresses the need to provide tariff concessions on certain imported goods by establishing a framework for Tariff Concession Orders (TCOs). This legislation allows the Chief Executive Officer of Customs to reduce or eliminate customs duty on goods that meet specific criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. The purpose of this mechanism is to support Australian industries by protecting them from local competition, while also encouraging the import of goods that are not domestically produced. The explanatory statement for Instrument TCO No. 0712437, made under this Act, illustrates the process by which a TCO can be granted, as demonstrated in the case of certain tissue paper edge embossers, where the duty rate was reduced from 5% to free. This process includes a requirement for public consultation, which in this instance did not yield any submissions opposing the TCO.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to certain goods, subject to specific criteria. This legislative framework applies to any individual or entity that applies for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act as ineligible for such concessions. The scope of the Act extends to any goods that can be shown not to have substitutable domestic production on the date the TCO application is lodged, as per section 269C of the Act. The geographic and jurisdictional reach of the Act is national, applying across Australia, and the Act's provisions are implemented and enforced under the Commonwealth jurisdiction. The Act does not specify exclusions, exemptions, or thresholds for TCO applications, other than those set out in section 269SJ, and the application of the Act may be extended or clarified through subordinate instruments, such as regulations or further orders made under the authority of the Act.
Key Provisions
The Customs Act 1901 (the Act) contains provisions that allow for Tariff Concession Orders (TCOs) under Part XVA. An application for a TCO can be made to the Chief Executive Officer of Customs (the CEO) by a person under section 269F of the Act, provided the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria set out in section 269C, which requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are defined in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they are required under subsection 269P(3) to issue a written order that declares the goods subject to a reduced customs duty rate.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the application is made for goods that are not specified in section 269SJ of the Act, and that the application meets the core criteria outlined in section 269C. The CEO must then assess these criteria and, if satisfied, issue a TCO. The CEO is also required under subsection 269K(1) to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In the case of TCO No. 0712437, the CEO did not receive any submissions in response to this invitation.
Failure to comply with the requirements of the Act or the TCO can lead to civil and criminal consequences. While the Explanatory Statement does not specify particular offences or penalties, breaches of customs legislation generally can result in penalties under the Customs Act 1901, which may include fines and imprisonment for individuals, as well as fines for corporations. The maximum penalties depend on the nature and seriousness of the breach but can be substantial under Australian law. The rights of importers are beneficially affected by the TCO, allowing them to 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. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration.