EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800278
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.
Elof Hansson Pty Ltd applied for a TCO in respect of certain silicone base paper on 07 January 2008.
Instrument
TCO No 0800278 was made on 28 March 2008. It declares that those certain silicone base papers 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. 0800278 is taken to have come into force on 07 January 2008.
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. 0800278 was enacted under the Customs Act 1901, addressing the gap in tariff concessions for specific goods that are not produced in Australia. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions, reducing customs duty for certain imported goods where no substitutable goods are produced domestically. The instrument was introduced to provide economic relief and stimulate trade by lowering import costs for businesses. The Australian Parliament enacted this instrument to ensure that the application process aligns with the core criteria, which include verifying that no suitable Australian-made alternatives exist for the imported goods. The policy objective is to facilitate smoother trade operations and encourage the import of goods that cannot be domestically produced, thereby benefiting importers and potentially the broader economy.
This instrument was brought into effect on 28 March 2008, following an application by Elof Hansson Pty Ltd for tariff concessions on certain silicone base papers. The CEO of Customs was satisfied that the application met the core criteria, leading to the issuance of TCO No. 0800278. This order declares that the specified silicone base papers are subject to a free rate of duty, down from the general rate of 5%, effective from the date the application was lodged, 7 January 2008. The CEO published a notice inviting submissions against the TCO, but none were received, leading to the instrument's formal registration and implementation.
Scope and Application
The Tariff Concession Instrument No. 0800278 under the Customs Act 1901 applies to specific goods, in this case certain silicone base papers, and it is directed towards entities seeking tariff concessions for these goods. The act allows for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). The TCO mechanism is applicable to any person who meets the core criteria specified in the Act and whose goods are not listed in section 269SJ as ineligible for tariff concessions. The CEO must be satisfied that no substitutable goods are produced in Australia for the goods in question. This instrument has a national reach within Australia and is governed by the Commonwealth. The TCO does not impose any new liabilities or disadvantage existing rights of persons other than the Commonwealth, and it does not affect rights as they stood before the date of registration. Any person, including importers, who considers that there are reasons why the TCO should not be made can lodge a submission with the CEO, although in this instance, no submissions were received. The instrument extends its application through subordinate instruments, which may include further definitions and specific conditions regarding the eligibility of goods and the process for making TCO applications.
Key Provisions
The Tariff Concession Instrument No. 0800278, under section 269P(3) of the Customs Act 1901, establishes a concession on the duty payable for certain silicone base papers, specifying that they are subject to a free rate of duty as opposed to the general rate of 5% (section 269P(3)). This is contingent upon the Chief Executive Officer of Customs (CEO) being satisfied that no substitutable goods are produced in Australia (section 269C). The application for such a tariff concession order (TCO) must be made in accordance with section 269F, and it must not be in respect of goods specified in section 269SJ, which are ineligible for a TCO (section 269F). The CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies once the core criteria are met (section 269P(3)).
The obligations under this legislation require that any application for a TCO must meet the core criteria set out in the Customs Act 1901. Specifically, section 269C of the Act mandates that no substitutable goods should be produced in Australia in the ordinary course of business on the day the application is lodged. Moreover, section 269K(1) imposes an obligation on the CEO to publish a notice in the Gazette, inviting any interested party to submit their views on the proposed TCO. The CEO must then consider these submissions before making a decision (subsection 269K(1)). Additionally, the CEO must ensure that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and no new liabilities are imposed under the TCO (subsection 269S(1)).
The Customs Act 1901 does not explicitly detail specific offences or penalties for breaches related to Tariff Concession Orders. However, any breaches of the Customs Act 1901 or associated regulations could result in significant civil or criminal penalties. For example, under section 236 of the Customs Act 1901, engaging in fraudulent activities related to customs duty can lead to criminal charges, with penalties including fines and imprisonment. In civil matters, incorrect declarations or non-compliance may result in financial penalties and the obligation to pay any unpaid duty and interest, as outlined in the Customs Act 1901 and the Customs Regulation 1999. The specifics of these penalties would depend on the nature and severity of the breach.