EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719495
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.
Australian Paper Pty Limited applied for a TCO in respect of certain paper or paperboard making machine roll shells on 19 November 2007.
Instrument
TCO No 0719495 was made on 29 January 2008. It declares that those certain paper or paperboard making machine roll shells 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. 0719495 is taken to have come into force on 19 November 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. 0719495, made under the Customs Act 1901, was introduced to address the need for concessional tariff rates for specific goods, ensuring they are accessible at reduced costs while promoting trade efficiency. Enacted in 2008, this instrument was established by the Chief Executive Officer of Customs, who applied the provisions of the Customs Act to grant tariff concessions on certain paper or paperboard making machine roll shells. This legislative measure was designed to alleviate the financial burden on businesses importing these specific goods, thereby enhancing their competitiveness and operational efficiency. The policy objective behind this concession is to provide a practical solution to importers by reducing the duty rate from the general 5% to free, provided no substitutable goods are produced domestically. The instrument was published in the Gazette, inviting public submissions which, in this case, did not eventuate.
Scope and Application
The Tariff Concession Instrument No. 0719495 applies to goods specified in the instrument, namely certain paper or paperboard making machine roll shells, and to the application process as outlined under the Customs Act 1901. The Act applies to any person or entity that imports these specified goods, thereby directly affecting importers and potentially benefiting them by reducing the customs duty to zero. The instrument operates within the jurisdictional reach of the Commonwealth, as it is made under the authority of the Customs Act 1901, and affects the rates of customs duty as prescribed by the Customs Tariff Act 1995. The application process is overseen by the Chief Executive Officer of Customs, who evaluates whether the goods are eligible for tariff concessions based on specific criteria, including the absence of substitutable goods produced in Australia. The instrument does not apply to goods specified in section 269SJ of the Customs Act 1901, which are excluded from tariff concession eligibility. The instrument does not impose any new liabilities on individuals or entities, and it does not affect the rights of persons, except to beneficially alter the customs duty rates for the specified goods.
Key Provisions
The key sections of the Customs Act 1901 (the Act) that govern Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269SJ (sections 269C, 269F, 269P, 269SJ). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not involve goods specified in section 269SJ and that it meets the core criteria in section 269C, the CEO must make a written order. The core criteria require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO must declare, via a TCO, that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting a tariff concession.
The Act imposes specific obligations on the CEO, including the duty to publish a notice in the Gazette when a TCO application is accepted as valid. This notice invites any person who considers the TCO should not be made to lodge a submission with the CEO. Additionally, section 269S(1) of the Act dictates that a TCO is effective from the date the application was lodged, meaning that any tariff concessions apply retroactively from that date. The Act also ensures that the TCO does not adversely affect the rights of any person (other than the Commonwealth) as they stood on the date of registration.
Breaching the conditions set forth in the Customs Act 1901 could result in civil or criminal consequences, although specific offences and penalties are not detailed in the Explanatory Statement. The Act generally outlines the process and criteria for granting tariff concessions, but it does not explicitly mention penalties for non-compliance with these provisions. However, any misuse or improper application of the TCOs could potentially lead to legal action under broader provisions of the Customs Act or other related legislation, which may involve significant penalties depending on the nature and severity of the breach.
Under the Customs Tariff Act 1995, the tariff rate for the paper or paperboard making machine roll shells specified in TCO No. 0719495 is set at free, as opposed to the general rate of 5%. This concession aims to benefit importers by reducing their duty obligations for these goods. Furthermore, the TCO does not impose any new liabilities on any person, ensuring that its implementation does not disadvantage existing stakeholders or create new financial burdens. Instead, it seeks to provide a tariff benefit that aligns with the policy objectives of the Customs Act.